Prudential Cuts Genesis Micro Opinion
Prudential lowered its investment rating on Genesis Micro (GNSS ) to hold from buy.
Analyst Tristan Gerra says the downgrade was based on the dismal pricing outlook for the company's main line of business, integrated analog ICs in the 15-inch market. Gerra says that in his opinion, growth resides in the 17-inch panel market. He no longer thinks the company will be able to diversify in non-commodity businesses rapidly enough to offset market share losses and pricing erosion in its core business. Gerra says a recent report indicates flat panel display demand is now "price-constrained" rather than supply-constrained.He cut his $0.40 fiscal 2003 (ending March) EPS estimate to $0.26, and his $15 price target to $5.