Wedbush Cuts OmniVision Technologies Price Target Following Disappointing FQ3 Outlook
In a research report sent to investors today, Wedbush analyst Betsy Van Hees reiterated a Neutral rating on OmniVision Technologies (NASDAQ:OVTI) and reduced her price target to $25 (from $28), which represents a slight downside potential from current levels.
Van Hees wrote, “We believe the disappointing FQ3 revenue outlook and management’s commentary clearly support our long term concerns that the increasing competitive landscape in the highly price-sensitive and unpredictable Asian handset market is a considerable challenge negatively impacting OVTI’s revenue growth and earnings power. However, we don’t expect this to result in much downward pressure on the stock given the buyout offer of $29 in cash per share that OVTI received in mid-August from private equity firm HCM that the Board of Directors continues to evaluate.”
The analyst explained her new price target, “Our new 12-month PT of $25 (from $28) is based upon about 15x our CY:15 pro forma EPS estimate of $1.11 plus $7.99 in net cash per share (from 19x our CY:15 pro forma EPS estimate of $1.49).”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Betsy Van Hees has a total average return of 20.8% and a 69.6% success rate. Van Hees has a 55.7% average return when recommending OVTI, and is ranked #125 out of 3393 analysts.