Analyst Actions: Sequenom, Cadence Design, Sunpower
Oppenheimer downgrades to underperform
Oppenheimer analyst Amit Hazan cuts Sequenom to underperform from perform after the company said the expected launch of its SEQureDx Down Syndrome test is delayed because several of its employees mishandled R&D test data and results.
Hazan notes a group of independent directors have begun an investigation, and the SEC and FDA have been alerted. But given the importance of this test to SQNM's valuation and the unknown impact to the company from the investigation, he downgrades the stock.
He also notes first quarter results missed Street estimates. He widens $1.06 2009 loss view to $1.07 loss.
Cadence Design Systems (CDNS)
Cowen upgrades to outperform from neutral
Cowen analyst Raj Seth says there were no surprises in Cadence's first quarter results. He upgrades for long-term investors that can wait for 2010/2011 deal renewal cycle and for ongoing model shift to play out.
Seth notes he did checks to make sure nothing was terribly broken; it is equally important to hear a commitment from the company to cut costs further to ensure operating profit margins (OPM) in 25% range in the second half of 2012. He expects intermediate milestones (OPM) in the next several quarters.
He sees 2012 EPS in $0.70 range and while that is a long time from now, OPMs should begin to move from -12% (in the second quarter 2009) toward 20%+ in 2011.
AmTech Research upgrades to buy
AmTech Research upgrades Sunpower to buy from neutral. The firm notes that despite expected weakness in near-term demand, they believe the risk/reward in SPWRA has now become favorable following the removal of two key overhangs. The firm believes increased legislative support coupled with an improving financing environment will lead to a return to growth in 2010, and SPWRA will be well-situated to benefit through industry leading technology and exposure to the U.S. market.