Jefferies upgraded OmniVision Technologies (OVTI) to hold, explaining that the company's quarterly results beat estimates and guidance.
OmniVision Technologies posted 41 cents vs. 28 cents second quarter earnings per share on a 50% revenue rise. It sees 42 cents to 47 cents third quarter earnings per share on revenue of $130 million to $140 million.
Analyst Adam Benjamin believes the company's camera phone business is back on track and its technical issues of a year ago have been largely resolved. He notes that the slower transition of the camera market to higher megapixels has allowed the company to fix its OmniPixel parts and secure design wins. He upped his 89 cents calendar year 2006 earnings per share estimate to $1.43, his $1.17 fiscal year 2006 (ending April) to $1.46, and his 80 cents fiscal year 2007 to $1.34. He also upped his $11 price target to $20. However, despite big increases to estimates, he remains cautious as he expects competition to further intensify in the camera phone market.