Stock Picks: Atmel, BlackRock, JDS Uniphase, Symantec
Atmel Corp.: Rodman & Renshaw equity analyst Ashok Kumar maintained an outperform rating on shares of Atmel Corp. (ATML) on May 6, with a fair value of $8 on the stock.
In a note, Kumar said that the maker of chips for household appliances posted March-quarter revenues of $349 million on May 4, ahead of the company's earlier guidance range of $330 million to $344 million and the Wall Street consensus estimates of $340 million. Kumar said Atmel's earnings per share (EPS) of 4 cents was also above the consensus estimate of 1 cent on higher revenues and interest income, and lower taxes.
Kumar said the company's June-quarter revenue guidance of $366 million to $380 million was well ahead of Wall Street estimates of $350 million, with gross margins estimated between 39% to 41%. He said Atmel "is well on its way" to its targets of 45% gross margin and 15% operating margin.
"Handset designs wins at HTC, Motorola, Nokia, and Samsung should contribute to the financial out-performance for the remainder of the year," Kumar said.
BlackRock Inc.: UBS Securities initated coverage of BlackRock Inc. (BLK) with a buy rating and $210 price target on May 6.
UBS equity analyst Glenn Schorr said in a note that he thinks BlackRock, the world's largest asset manager, is "very well positioned to benefit from the secular growth trends of 'active to passive' [fund management], the push for more tailored solutions, and continued positive fixed income flows".
"BlackRock's respected brand name, breadth of product offerings, and distribution capabilities should enable the firm to capitalize on the continued development of capital markets around the globe," he wrote.
Schorr said he thinks the stock is "attractive" given BlackRock's broad asset mix, its market leadership in passively managed index products, and its "solid" long-term performance.
The analyst set EPS estimates of $10.38 for 2010, $12.35 for 2011, and $14.50 for 2012.
JDS Uniphase Corp.: RBC Capital Markets equity analyst Mark Sue kept an outperform rating on shares of JDS Uniphase Corp. (JDSU) on May 6, with a $16 price target on the stock.
On May 5, JDS Uniphase, the maker of fiber-optic equipment, posted third quarter EPS of 10 cents, above the 9-cent average estimate of analysts in a Bloomberg survey. Sales of $332.3 million were 2.5 percent below the average estimate of $340.9 million.
Sue said in a note that JDS Uniphase's revenue missed estimates, "while its costs are rising and there is pricing pressure in its Test & Measurement segment". He noted that the lower-than-expected revenues were due to supply constraints, as "bookings are at record levels of $400 million". He said that near-term cost increases are related to acquisitions, while recent pricing action "may be primarily driven by one competitor".
The analyst said the company's guidance for June-quarter revenue of $385 million to $410 million was above the consensus view of about $370 million, as adjusted for its acquisition of Agilent Technologies Inc.'s network solutions test unit. He raised calendar-year EPS estimates for 2011 to 70 cents from 60 cents and for 2012 to 85 cents from 80 cents.
Symantec Corp.: Standard & Poor's equity analyst Jim Yin maintained a hold rating and $18 price target on shares of Symantec Corp. (SYMC) on May 6.
On May 5, Symantec, the biggest maker of security software, reported a fourth-quarter profit after customers added programs to protect and store information.
Profit was $184 million, or 23 cents a share, compared with a loss of $264 million, or 32 cents, a year earlier, the company said in a statement. Excluding some costs, profit was 40 cents a share, topping the 37-cent average estimate of analysts in a Bloomberg survey.
In a posting on the S&P MarketScope service, Yin said that Symantec's fourth-quarter EPS of 23 cents was 4 cents better than his estimate, while revenues, which rose 4.3% to $1.53 billion, were $36 million above his forecast. Symantec cited strength in its consumer business and stability in its enterprise business, Yin said.
"Although we think the company is executing well, we believe IT spending for enterprise software will remain sluggish," Yin wrote. He expects fiscal 2011 (ending March) revenues to grow "in the low-single digit" percentage range due to unfavorable foreign currency exchange effects.
The analyst raised a fiscal 2011 EPS estimate by 3 cents to 92 cents on expectations for "slightly higher" revenues.