Pacific Growth downgrades NETGEAR (NTGR ) to equal-weight from overweight.
Analyst Erik Suppiger says he's concerned that price pressure in home networking market could pose a challenge over the next couple of quarters. He says he believes December-quarter results were in line with estimates due to seasonal strength, but he feels price drops, particularly in 802.11g and Super G products, cut the prospect for a potential upside in the first-half of 2005.
He thinks the company will be challenged to offset noted price drops over the next few quarters. Given heightened near-term risk to top line and the potential for corresponding margin degradation, Suppiger would equal-weight the company.
He retains his 95 cents 2005 earnings per share estimate.