) to buy from neutral.
Analyst John Lau says the upgrade is based on an improved semiconductor pricing environment and on continued strength in the handset market. He believes a better pricing environment will help expand margins. Also, he believes there are reduced concerns of handset overbuild in the first quarter. He says his proprietary research survey shows pricing for catalogue components have increased 22% quarter-over-quarter in the first quarter.
Lau raised his EPS forecasts from 19 cents to 21 cents for the first quarter, from 90 cents to 98 cents for 2004, and from $1.21 to $1.30 for 2005. He upped his $32 price target to $37.