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Brink's Co. (BCO)

Oppenheimer reiterates outperform

Oppenheimer analyst Ian Zaffino reiterated an outperform rating on Brink's on Feb. 3, saying that the global provider of security services reported better-than-expected fourth-quarter adjusted EPS of 59 cents, vs. his estimate of 45 cents and the Wall Street consensus view of 49 cents.

Zaffino said in a note that Brinks management expects to increase 2010 revenues at a percentage range in the low-to-mid single digits from existing businesses; favorable foreign exchange rates could provide another boost. The analyst said he believes the risk of a currency devaluation in Venezuela is be behind the company, as it already reports results there at the less favorable parallel rate.

Zaffino said he also thinks there is potential for a turnaround in the company's European business and a rebound in the diamond/jewelry business, as the luxury market "has indicated signs of a nascent recovery". He has a $27 12-18 month price target on the stock.

Monolithic Power Systems Inc. (MPWR)

Wedbush Morgan downgrades to underperform from neutral

Wedbush Morgan analyst Patrick Wang downgraded his rating on shares of Monolithic, a maker of advanced analog and mixed-signal semiconductors, on Feb. 3. Wang said in a note that he expects the company to experience gross margin compression in the near- and mid-term as low margin -- but high volume -- chip designs start ramping up in the first quarter for end markets such as notebook computers and consumer electronics.

The analyst noted that Monolithic will post financial results on Feb. 4; he sees strong fourth-quarter results, with the company providing first-quarter revenue guidance well above the Wall Street consensus expectation.

Wang said he believes aggressive pricing strategies could take hold, driving gross margins lower, outweighing significant revenue growth. He said he sees "meaningful downside risk" as a result, and cut his $28 price target on the stock to $18. The analyst expects Monolithic to post EPS of 21 cents in the 2009 fourth quarter and 68 cents in 2010.

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