UPDATE: Citi Upgrades Rambus
In a report published Thursday, Citi analyst Terence Whalen upgraded Rambus (NASDAQ: RMBS) to Buy from Neutral, keeping its $12.00 price target.
According to the report, On 1/5/14 Rambus and Samsung renewed their patent license agreement for an additional 10-year term at $15M/Q royalty payment versus $20M-$25M previously. With this ~$30M headwind now in '14 estimates, analysts anticipate future revisions to inflect positive around new licensing momentum from CEO Ron Black's customer-solutions focused initiatives.
“With the main negative risk (Samsung renewal) realized 1/5/14, 3 factors should drive positive '14 revisions: a) new SoC licensing deals (SoC licensees include STM, Mediatek, NVDA, BRCM, FSL but exclude XLNX, ALTR, TXN, QCOM, INTC), b) ‘new business' growth primarily in Cryptography Research sales, and c) potential addition of the last remaining DRAM licensee Nanya,” the report noted.
RMBS closed Wednesday at $9.04 with shares trading 4.87 percent.
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