- Piper Jaffray is cautious on Intersil (NASDAQ:ISIL) noting that over the past several months, there has been a growing cloud of uncertainty surrounding the PC and related markets (e.g., optical storage). While they believe 3Q06 revenue guidance could be intact, they are increasingly concerned about revenue projections for 4Q06. Although the firm recognizes that PC demand has recovered somewhat from depressed levels in 2Q06, they believe PC/Optical Storage demand could be less than seasonal, especially in 4Q06 due to the Vista delay and shift in consumer spending from PC-related products toward FPTVs/DSCs/PMPs.
Intermediate term, they believe Intersil's focus markets could become more competitive, especially notebooks. Based on recent analysis and checks into the global power management market, the firm believes the design cycle for 2007 notebooks has become more competitive with traditionally dominant players like Maxim and Intersil now facing incremental competition from Texas Instruments and Richtek.
Given NT concerns, the firm is lowering their 4Q06 revenue growth estimate from 6% Q/Q to 3% Q/Q ($206.8MM to $201.0MM) and non-GAAP EPS from $0.34 to $0.32. They are also lowering oCY06 and CY07 non-GAAP EPS estimates from $1.23 to $1.22 and $1.45 to $1.29, respectively.
Target goes to $25 from $29. Maintains Mkt Perform.
Notablecalls: Expect to see further weakness in ISIL today. I'm betting about 1 pt.
Intermediate term, they believe Intersil's focus markets could become more competitive, especially notebooks. Based on recent analysis and checks into the global power management market, the firm believes the design cycle for 2007 notebooks has become more competitive with traditionally dominant players like Maxim and Intersil now facing incremental competition from Texas Instruments and Richtek.
Given NT concerns, the firm is lowering their 4Q06 revenue growth estimate from 6% Q/Q to 3% Q/Q ($206.8MM to $201.0MM) and non-GAAP EPS from $0.34 to $0.32. They are also lowering oCY06 and CY07 non-GAAP EPS estimates from $1.23 to $1.22 and $1.45 to $1.29, respectively.
Target goes to $25 from $29. Maintains Mkt Perform.
Notablecalls: Expect to see further weakness in ISIL today. I'm betting about 1 pt.
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