Wedbush Maintains Neutral On OmniVision, Increases PT To $28
In a research note published this morning, Wedbush analyst Betsy Van Hees maintained a Neutral rating on OmniVision (NASDAQ: OVTI) and increased her price target to $28 (from $27), which represents a 3% upside from where the stock is currently trading.
Van Hees wrote, “OmniVision printed a considerable FQ1 (Jul) bottom-line beat driven by a tax benefit. Excluding the tax benefit, it was still a solid beat driven by mainstream and value smartphones in China offsetting declines in NA Tier 1 OEMs. Overall ASP slightly declined Q/Q despite higher resolution mix of 3MP and above (50% vs. 43% in FQ4) due to competitive pricing environment in China. While market share losses at Apple are now in the numbers (guides FQ2 revenue down -11% to -4% Q/Q), we continue to not expect much movement in the stock given the buyout offer the Board is evaluating from HCM of $29 in cash per share.”
Van Hees continued, “While pro forma EPS range of $0.43 to $0.59 was just a tad higher than the Street, revenue outlook of $360MM to $390MM (down -11% to -4% Q/Q) was in-line with the Street ($375MM/$0.49) and our ($374MM/$0.49) estimates. OVTI noted that strength in mainstream and value smartphones in China and emerging automotive market is partially offsetting the decline at NA Tier 1 OEMs. Although FQ2 guide was in-line with lowered expectations, our LT concerns regarding increasing competitive landscape in auto/security and the highly price competitive and unpredictable Asian handset market remain unchanged.”
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 23.4% and a 76% success rate. Van Hees has a 55.7% average return when recommending OVTI, and is ranked #86 out of 3266 analysts.