- Merrill Lynch comments on Martek Biosci (NASDAQ:MATK) following Friday's long-term supply contract with General Mills (GIS), which sent the stock up more than 10%. According to the firm, this type of deal was widely expected, so they would SELL into the strength because 1) there are no minimum purchase requirements so the value is still uncertain & likely less than the Street estimates, 2) scope of product launches will likely be limited at first, and 3) firm maintains their thesis that as a % of total volume sales, DHA fortified foods are unlikely to exceed 5-10% of product volumes, limiting Martek's revenue opportunity.
They believe that yogurt is the likely target product for GIS' use of DHA. GIS is the 2nd leading brand for yogurt, which includes the Yoplait and Columbo brands, with retail sales of about $1 BB, based on IRI data. Based on an analysis of GIS yogurt volume sales, and an estimated bulk price for Martek's DHA, they estimate that the realistic max revenue opportunity from this contract is about $25-30 MM. But, assuming an '07 product launch, they estimate that GIS could contribute $5-10 MM in revenue by '10.
Notablecalls: Gotta respect the Merrill call. These guys switched to Sell in September 05 when the stock was considerably higher. On the other hand, short interest stands at 25% of float. Never short these stocks or you'll have the tire marks on your back to show for it. It's only good for a quick short scalp if we get a tier-2 or lower firm upgrade the shares this morning.
- Jefferies & Co is positive on SiRF Tech. Hldngs (NASDAQ:SIRF) recommending investors take advantage of the recent sell-off in the tech market to build positions in SiRF as they expect continued design win momentum, as well as increasing GPS adoption rates across a broad range of consumer devices, to drive significant revenue growth and profitability through 2006 and 2007.
Firm thinks that talk of competition will likely continue, yet they believe SiRF has some answers - 1) Bluetooth and 2) integration. They believe SiRF will sample its integrated Bluetooth/GPS solution in Q3 with shipments starting in Q4. Believes this provides a significant advantage over its competitors as pricing continues to be a driving factor. SiRF's solution will provide it with a $2 ASP boost (roughly $10 for GPS discrete + $5 for standalone BT = $12 for integrated solution), and more importantly, continue to further its technology leadership. Reits Buy and $42 tgt.
Notablecalls: Jeffco doesn't have the following to move SIRF but the overall price action points towards additional gains.
- JP Morgan comments on Intel (NASDAQ:INTC) and AMD (NYSE:AMD) after spending the last week in Asia with their Asia Technology Research Team visiting several companies to assess PC and overall semiconductor supply chain health. Every PC food chain company the firm met with is experiencing lower than expected demand, with hopes for stronger demand in the back half of the year.
Firm's checks indicate Intel recently cut price on most of its microprocessors by up to 50-60%, and generated no elasticity in demand. In fact, several companies reported additional downside after the Intel price cuts. AMD also appears to be cutting price to keep up with Intel. The push-outs and cancellations were across the board for notebooks and desktops, with every major PC OEM cutting orders - Dell, HP, Acer and others.
Intel appears to be poised to re-gain market share versus AMD on the desktop front, as every PC food chain company they met with agreed Intel's upcoming Conroe desktop processor is ahead of AMD's desktop processor in both performance and power consumption. It appears AMD might still have an advantage in servers, especially in four-way servers.
Due to the poor demand and price cuts, they are lowering estimates on Intel and AMD. Firm remains cautious on semiconductor stocks due to the demand problem, especially since the push-outs and cancellations haven't been felt by the US semiconductor companies yet.
Notablecalls: Not actionable but good to know category. So why am I highlighting the call? It's because UBS upgraded INTC to Buy from Neutral this morning.
They believe that yogurt is the likely target product for GIS' use of DHA. GIS is the 2nd leading brand for yogurt, which includes the Yoplait and Columbo brands, with retail sales of about $1 BB, based on IRI data. Based on an analysis of GIS yogurt volume sales, and an estimated bulk price for Martek's DHA, they estimate that the realistic max revenue opportunity from this contract is about $25-30 MM. But, assuming an '07 product launch, they estimate that GIS could contribute $5-10 MM in revenue by '10.
Notablecalls: Gotta respect the Merrill call. These guys switched to Sell in September 05 when the stock was considerably higher. On the other hand, short interest stands at 25% of float. Never short these stocks or you'll have the tire marks on your back to show for it. It's only good for a quick short scalp if we get a tier-2 or lower firm upgrade the shares this morning.
- Jefferies & Co is positive on SiRF Tech. Hldngs (NASDAQ:SIRF) recommending investors take advantage of the recent sell-off in the tech market to build positions in SiRF as they expect continued design win momentum, as well as increasing GPS adoption rates across a broad range of consumer devices, to drive significant revenue growth and profitability through 2006 and 2007.
Firm thinks that talk of competition will likely continue, yet they believe SiRF has some answers - 1) Bluetooth and 2) integration. They believe SiRF will sample its integrated Bluetooth/GPS solution in Q3 with shipments starting in Q4. Believes this provides a significant advantage over its competitors as pricing continues to be a driving factor. SiRF's solution will provide it with a $2 ASP boost (roughly $10 for GPS discrete + $5 for standalone BT = $12 for integrated solution), and more importantly, continue to further its technology leadership. Reits Buy and $42 tgt.
Notablecalls: Jeffco doesn't have the following to move SIRF but the overall price action points towards additional gains.
- JP Morgan comments on Intel (NASDAQ:INTC) and AMD (NYSE:AMD) after spending the last week in Asia with their Asia Technology Research Team visiting several companies to assess PC and overall semiconductor supply chain health. Every PC food chain company the firm met with is experiencing lower than expected demand, with hopes for stronger demand in the back half of the year.
Firm's checks indicate Intel recently cut price on most of its microprocessors by up to 50-60%, and generated no elasticity in demand. In fact, several companies reported additional downside after the Intel price cuts. AMD also appears to be cutting price to keep up with Intel. The push-outs and cancellations were across the board for notebooks and desktops, with every major PC OEM cutting orders - Dell, HP, Acer and others.
Intel appears to be poised to re-gain market share versus AMD on the desktop front, as every PC food chain company they met with agreed Intel's upcoming Conroe desktop processor is ahead of AMD's desktop processor in both performance and power consumption. It appears AMD might still have an advantage in servers, especially in four-way servers.
Due to the poor demand and price cuts, they are lowering estimates on Intel and AMD. Firm remains cautious on semiconductor stocks due to the demand problem, especially since the push-outs and cancellations haven't been felt by the US semiconductor companies yet.
Notablecalls: Not actionable but good to know category. So why am I highlighting the call? It's because UBS upgraded INTC to Buy from Neutral this morning.
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