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Collins Stewart Reiterates Buy Rating on Volterra semi (VLTR)

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Collins Stewart is out with a research note this morning, where it reiterates its Buy rating on Volterra Semiconductor (NASDAQ: VLTR); it has a $35.00 price target on the stock.

The Collins Stewart analyst said, “Despite concerns of softening consumer PC demand in Europe, firm checks indicate that IT server demand remains robust in Western Europe, despite macro risks. Additionally, firm checks indicate IBM (Represents VLTR's largest customer at 33% of revenues) is maintaining its strong market share in IT servers and continues to benefit from a strong enterprise IT spending environment. We are increasing our estimates for 2010/11, which reflect increasing confidence in continued enterprise spending for IT servers over the next 12-18 months. Additionally, we remain confident and expect tailwinds from a corporate client PC refresh in 2H’10.”

They added, “We are expecting solid Q2 results driven by continued healthy demand trends in servers (Nehalem) and in PC NB. Our Q2 estimates of $40.1M (+11% q/q) / 37c are inline with Street. While VLTR is not immune from headwinds in PC NB, we believe that new ramping design wins and a beneficial mix and exposure to enterprise-class NB PC models will mitigate softness in PC NB demand.”

“We anticipate strong Q3’10 guidance and are increasing our ests to $42.7M / 40c from $40.7M / 36c prior. Our increased ests are above Street of $42.4M / 36c and reflect increased confidence in continued strong enterprise spending trends in servers and increasing corporate client PC demand in Q3.”

The CS analysts closed by saying, “We are raising our 2010 estimates to $165M/ $1.57 from $159M/ $1.45 prior. Our new estimates reflect higher PC/Server assumption as firm channel checks suggest that enterprise IT spending remains strong in US and Europe, and is expected to accelerate in 2H. Accordingly, we raise 2011 to $189M/$1.73 from $182M/$1.69.”

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Posted-In: Collins StewartAnalyst Color Price Target Analyst Ratings

 

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