JP Morgan added Pinnacle Systems (PCLE ) to its focus list.
Analyst Paul Coster says the maker of production tools for video processing is the top pick of JP Morgan's applied technologies research team. Based on channel checks in the middle of the current quarter, Coster says he thinks Pinnacle is on track to meet or beat estimates for the fourth quarter of fiscal 2002 (June). He sees $0.05 fourth quarter earnings per share, as well as $0.01 for fiscal 2002 and $0.34 for fiscal 2003.
Coster thinks the company is tapping into growth drivers in both the broadcast and consumer segments of the market. He views the stock as under-valued; as of Monday's close it traded at 19.3 times his $0.46 calendar 2002 EPS estimate. He maintains his buy rating, and believes investors should be accumulating positions in Pinnacle shares ahead of fourth quarter earnings, which are due out on July 29.