Adams Harkness upgraded PDF Solutions (PDFS) to strong buy from market perform.
Analyst Dennis Wassung says he expects IDS Software, which was recently acquired by PDF, to add materially to PDF's business in 2004, offering potential upside to his estimates. He says IDS adds important complementary customers. Wassung expects the industry's improving integrated circuit volumes, and capital spending potential, to drive additional business for PDF -- including higher volume-based revenue in the second half of 2003 through 2004.
Wassung notes potential catalysts include customer announcements and combined company guidance reflecting the addition of IDS. He raised the 32 cents 2004 earnings per share estimate to 35 cents. He also set a 56 cents 2005 earnings per share estimate, and a $14 target.