JP Morgan Downgrades RF Micro Devices
JP Morgan downgrades wireless circuit maker RF Micro Devices (RFMD ) to neutral from overweight.
Analyst Christopher Danely says although he expects RF Micro Devices will gain share during 2005, he believes there is a possibility of an overbuild of handsets and seasonal weakness in wireless component order rates should cause the stock to be range-bound in the near term.
He maintains estimates given a belief the company should meet or slightly exceed his one cent third-quarter earnings per share and $165 million revenue estimates.
Although shares trade at 1.6 times calendar year 2005 earnings per share sales, near the low-end of its historical range, Danely believes there is a seasonal decline in wireless component order rates, and a risk of an overbuild will result in the stock being range-bound for one to two quarters.