UPDATE: Nomura Reiterates Neutral Rating, Lowers PT on Spreadtrum Communications Following Investor Meeting

In a report published Wednesday, Nomura reiterated its Neutral rating on Spreadtrum Communications SPRD, but lowered its price target from $21.70 to $18.00. Nomura noted, “After SPRD‟s investor meeting, we maintain our Neutral rating and lower our TP to USD18 (from USD21.7) on an unchanged 10x 2013F EPS estimate. The next six months are critical to SPRD because it targets to ship many new chips in this period. Given that SPRD shares have underperformed the market by 36% since its November investor call, coupled with recent guidance that its first dual core TD chip 8825 (2xA5) will start shipping by April (as a catalyst), we expect a possible share price rebound in the short term. However, we also look for competition to arise again when MediaTek‟s 2nd generation dual core MT6572 (2xA7), which in our view is a cost-competitive chip with improved performance (A7 vs. A5), comes out in May/June.” Spreadtrum Communications closed on Tuesday at $15.71.