UPDATE: Deutsche Bank Initiates Spreadtrum Communications at Buy on Smartphone Demand

Deutsche Bank initiated coverage on Spreadtrum Communications

with a Buy rating and a $28.70 price target. Deutsche Bank commented, "We see SPRD as another major beneficiary of booming low-cost smartphone demand from emerging markets, aside from MediaTek, in the coming years. After a product transition this year, we expect SPRD to resume its earnings growth in 2013. Thus, we suggest accumulating shares from now. … We identify three major growth drivers for SPRD: 1) increasingly strong smartphone demand with market share gains; 2) its entry into the WCDMA segment; and 3) its in-house connectivity IC solutions. We believe SPRD plays a key role in TD, and that its importance should last into 4G TD LTE." Spreadtrum Communications closed at $22.70 on Friday.