Jefferies Cuts Price Target on Inphi Corp. (PHI), Still a Good Buy
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Price: $172.27 --0%
Rating Summary:
14 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
14 Buy, 6 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reiterating its Buy rating on shares of Inphi Corp. (NYSE: IPHI), but is cutting its price target from $19 to $13.
The company reduced its third quarter revenue guidance by 26 percent due to a delay in Intel's (Nasdaq: INTC) Romley server platform, and weaker order momentum. The Romley server is now expected to be released in February of 2012, up from September of 2011, and accounts for roughly $4 million of the revenue reduction.
An analyst at Jefferies comments, "From a cyclical standpoint, we prefer stocks that lower expectations early during a downturn...With IPHI having declined ~50% YTD, 2012 EPS cut by ~50%, and $4/sh in cash, we think further downside to the stock is limited. We expect Inphi's LR-DIMM product cycle to drive upside over the next 6-to-12 months."
The firm believes that IPHI is set up to outperform its peers following a 50 percent reduction in its earning estimates and since the LR-DIMM product cycle was effectively pushed into 2012 from the second half of 2011.
Jefferies cut its 2011 EPS and revenue estimates from $0.44 and $91.5 million to $0.29 and $81.5 million. The firm also lowered its 2012 estimates from $0.83 and $127 million to $104.7 million.
For more ratings news on Inphi Corp. click here and for the rating history of Inphi Corp. click here.
Shares of Inphi Corp. closed at $10.50 yesterday.
The company reduced its third quarter revenue guidance by 26 percent due to a delay in Intel's (Nasdaq: INTC) Romley server platform, and weaker order momentum. The Romley server is now expected to be released in February of 2012, up from September of 2011, and accounts for roughly $4 million of the revenue reduction.
An analyst at Jefferies comments, "From a cyclical standpoint, we prefer stocks that lower expectations early during a downturn...With IPHI having declined ~50% YTD, 2012 EPS cut by ~50%, and $4/sh in cash, we think further downside to the stock is limited. We expect Inphi's LR-DIMM product cycle to drive upside over the next 6-to-12 months."
The firm believes that IPHI is set up to outperform its peers following a 50 percent reduction in its earning estimates and since the LR-DIMM product cycle was effectively pushed into 2012 from the second half of 2011.
Jefferies cut its 2011 EPS and revenue estimates from $0.44 and $91.5 million to $0.29 and $81.5 million. The firm also lowered its 2012 estimates from $0.83 and $127 million to $104.7 million.
For more ratings news on Inphi Corp. click here and for the rating history of Inphi Corp. click here.
Shares of Inphi Corp. closed at $10.50 yesterday.
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