BWS Financial Seeing Lower Inventory Levels at NETGEAR (NTGR)

September 3, 2008 10:05 AM EDT
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BWS Financial is out with a note on NETGEAR (Nasdaq: NTGR) considering recent channel checks that suggest a lower level of inventory than reported in Q2. The firm maintains a Buy rating and $22 price target on NETGEAR.

Heading into Q3 earnings, which are expected out the week of October 20, BWS sees channel inventories in tight condition. The firm says that it normally sees more Linksys products in stock than NETGEAR, but this does not seem to be the case this back-to-school season as NETGEAR appears to be focusing on preserving "as much margin as possible."

BWS says NETGEAR's recent "win at ZON TVCabo is of significant nature" as the firm considers "ZON to be a tier-two carrier" which has "potential in providing revenues close to what BSkyB has been generating for NETGEAR."

The firm said it is optimistic that NETGEAR will be able meet consensus estimates for its Q3 and said it remains a buyer of the stock at current levels.

NETGEAR, Inc. engages in the design, development, and marketing of networking products for home users and small businesses worldwide.

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