- Morgan Stanley comments on Semi space noting that thus far, the number of negative earnings surprises has been limited, but the sharp and fairly indiscriminate sell-off in stocks that has occurred in the last few months suggests that the number of negative surprises will increase in Q3 and/or downward revisions are likely. However, most stocks have already discounted a lot of bad news, and a near-term rally will likely occur as earnings season unfolds. As more news that is negative develops during the summer, further weakness would be likely, with an important SOX low in the 350-400 range.
Long-term valuations have become attractive for most stocks, and the firm believes that an important low will likely be reached as downward earnings revisions are made during the next few months. Currently, they believe that the third-quarter consensus revenue and/or EPS estimates for AMD, Broadcom, Intel, International Rectifier, Intersil, LSI Logic, SanDisk, and SiRF look high, while the estimates for Atheros and TI appear to be too low.
Notablecalls: Not actionable but good to know category.
- Thomas Weisel Partners notes that following multiple checks into the MP3 supply chain, they are modestly lowering their Sigmatel (NASDAQ:SGTL) revenue and EPS estimates to reflect a more aggressive pricing environment, somewhat softer-than-expected 3600/FM tuner traction and a mixed near-term MP3 player environment. Checks suggest that the 3600 video continues to be hindered by delays, crimping broader-based adoption. The 3600 represented 10% of revenue last quarter and had only begun to ship to key strategic OEM customers, such as Samsung and Creative.
Given their expectation of an ongoing slow new product adoption in an aggressive pricing environment, the firm continues not to see profitability as a near-term possibility. Believes the shares are fairly valued, trading at 0.8x firm's price CY06 sales forecast, which is discount to the peer median of 1.6x.
Notablecalls: Not actionable but good to know category.
Long-term valuations have become attractive for most stocks, and the firm believes that an important low will likely be reached as downward earnings revisions are made during the next few months. Currently, they believe that the third-quarter consensus revenue and/or EPS estimates for AMD, Broadcom, Intel, International Rectifier, Intersil, LSI Logic, SanDisk, and SiRF look high, while the estimates for Atheros and TI appear to be too low.
Notablecalls: Not actionable but good to know category.
- Thomas Weisel Partners notes that following multiple checks into the MP3 supply chain, they are modestly lowering their Sigmatel (NASDAQ:SGTL) revenue and EPS estimates to reflect a more aggressive pricing environment, somewhat softer-than-expected 3600/FM tuner traction and a mixed near-term MP3 player environment. Checks suggest that the 3600 video continues to be hindered by delays, crimping broader-based adoption. The 3600 represented 10% of revenue last quarter and had only begun to ship to key strategic OEM customers, such as Samsung and Creative.
Given their expectation of an ongoing slow new product adoption in an aggressive pricing environment, the firm continues not to see profitability as a near-term possibility. Believes the shares are fairly valued, trading at 0.8x firm's price CY06 sales forecast, which is discount to the peer median of 1.6x.
Notablecalls: Not actionable but good to know category.
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