Piper Jaffray Maintains an 'Overweight' on NetLogic Microsystems (NETL); Recent Pullback Presents Buying Opportunity

November 4, 2009 7:15 AM EST

Piper Jaffray maintains an Overweight rating on NetLogic Microsystems (Nasdaq: NETL), price target increased from $44 to $47.

Piper analyst says, "NETL reported a strong quarter and provided strong guidance for Q4 as well as CY10. While there have been concerns regarding the integration issues of the company's two acquisitions, it is not evident in the company's Q3 report or its forward guidance. NETL is one of our top picks as it is a primary beneficiary of the build-out of wireless data networks as well as the continued transition to wireline IP networks. Moreover, we believe that the inventory overshoot in cell phones and PCs is unlikely to impact NETL. The company is also entering the seasonally stronger part of the year for the communications infrastructure market, benefiting from government budget flush followed by normal strength in the first half. We believe that the recent pullback represents an excellent opportunity to accumulate NETL shares.

"The company continues to broaden its customer base with the addition of Ericsson (Nasdaq: ERIC) and ZTE (the second largest telecom equipment maker in China) in the quarter. We expect continued growth from these two customers going forward. We also believe that Brocade (Nasdaq: BRCD) will drive incremental growth as well. In addition, the company expects to see ramps from both Tellabs (Nasdaq: TLAB) and Siemens (NYSE: SI) in 2010."

To see more analyst ratings on NETL Click Here.

NetLogic Microsystems, Inc., a fabless semiconductor company, designs, develops, and markets processors and integrated circuits.

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