) to strong buy from buy.
Analyst Mark Kelleher says the upgrade is based on the company's strong market position in Fibre Channel, its solid long term growth prospects, and its current valuation. He notes that in the December quarter Emulex showed 18% sequential growth, a significant recovery from the economic weakness of the September quarter. He says the strength came from the company's OEM partners: IBM, EMC, and Compaq. Kelleher believes Emulex is on track to reach his 6% sequential growth and $0.14 EPS estimates in the third quarter, with continued strong market penetration of these key OEMs. He sees $0.49 fiscal 2002 (ending June) EPS, rising to $0.65 in fiscal 2003.The analyst has a $42.50 12-month price target based on his $0.80 calendar 2003 EPS estimate and 35% four-year EPS growth assumptions.