Citigroup upgraded its investment recommendation on shares of Plantronics (PLT ) to hold from sell.
Analyst Daryl Armstrong says that with the stock down around 15% since initiation of coverage few weeks ago, the risk/reward relationship is now more balanced. He also thinks the current valuation supported by the Oct. 21 disclosure around recently acquired Altec Lansing. Armstrong says revenues, margins, and business momentum for Altec in Plantronics' Form 8-K/A were better than expected. He increased his $1.66 fiscal 2006 (March) EPS estimate to $1.73 and his $1.95 fiscal 2007 forecast to $2.10; he also raised his $27 price target to $30. The analyst still thinks the company's core O&CC business will face incremental pressure from GN Netcom and its consumer end markets will become more competitive, pressuring margins.