Sterne Agee Maintains Buy, $40 PT on Power Integrations

Sterne Agee reiterates its Buy rating and $40 target price on Power Integrations

as it raises estimates on anticipated margin expansion in 2012. Sterne Agee notes, "December quarter revenue and EPS were slightly better than consensus, with channel inventories at 4.4 weeks versus historical lows of 4.0 weeks. We think these two positives will offset the March quarter guidance, which was slightly below consensus. After the significant guide-down following the September quarter earnings release, operating results have now started to show some stabilization, which we think reflects a trough in fundamentals." POWI closed at $37.06 a share on Thursday.