First Albany Lifts Atheros to Strong Buy
First Albany upgraded its investment recommendation on shares of Atheros Communications (ATHR) to strong buy from buy.
Analyst Auguste Richard says he believes the shares are "spring-loaded" going into the company's second-quarter EPS report July 24, as short interest has increased, he's confident the company will not miss estimates or guide third-quarter expectations lower. Moreover, he believes a cut in estimates is currently priced into the stock. He sees a number of positive catalysts for the rest of 2006; for example, he expects the company to announce its first revenues from the 802.11n and 802.11-embedded market in the second quarter, and the company to have a strong market position in 802.11n by year-end. Richard also expects the company's Apple (AAPL) revenue to continue to ramp.
The analyst maintains his EPS estimates of 66 cents in 2006 and 85 cents in 2007; he has a $32 price target on the stock.