Needham & Company downgraded OmniVision Technologies (NASDAQ: OVTI) from Buy to Hold.

Analyst Rajvindra Gill commented, "OVTI reported strong results in the April quarter and offered significantly better than expected guidance for the July quarter. The company continues to execute on its cost cutting initiatives having reported 10 consecutive quarters of GM% improvement. We believe the strong results, guidance and commentary signal improving conditions in the China handset market as OVTI noted seeing initial signs of recovery in the volatile industry. Given the pending takeout by Hua Capital Management for $29.75/share, we are removing our price target and updating our rating to a Hold believing current levels represent a fair discount in the event the merger is not approved."

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Shares of OmniVision Technologies closed at $27.11 yesterday.