J.P. Morgan Raised Estimates on OmniVision; Reiterates Overweight (OVTI)

J.P. Morgan is out with analyst note this morning, where they reiterate their Overweight rating on shares of OmniVision Technologies

, in addition to raising estimates. They have a $25.00 price target on the stock. JPM analysts said, “We are raising F1Q11 estimates toward the upper end of the range of guidance issued by the company. This reflects our view that OVTI is benefiting from strong demand for the 4th generation iPhone and the ongoing migration to higher resolution camera phones, many of which will now include two sensors to support video-conferencing.” They also noted, “We have increased unit shipments by 1.5 million in F1Q and we have assumed flat pricing q/q in each resolution category, where previously we assumed that the pricing would decline 2-5% q/q. We also assume that OVTI is able to exploit the strong demand to generate another 25 bp of gross margin, relative to prior expectations.” J.P. Morgan analysts said, “The catalyst for the adjustment to estimates is the report of stock-outs for the next generation iPhone 4 at AT&T. We believe OVTI is supplying CIS sensors for this device. We also believe TSMC's raised chip forecast, issued June 15, is supportive of the adjustment; we believe OVTI is a top 10 customer of TSMC.” Learn how to find the best

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