) to buy from neutral.
Analyst Joel Wagonfeld upgraded the stock on improved risk/reward. He notes the stock underperformed its industry, and is down 30% from recent highs in January and down 16% since reporting first-quarter results in April, even though estimates increased slightly during each of those periods. While execution will be critical, challenges remain, and he believes the current valuation provides attractive risk/reward.
Wagonfeld notes that near-term catalysts include next week's analyst day and ramp of AX-100. Longer term, he thinks selling, general, and administrative expense leverage should improve relative to current expectations.
He sees earnings per share of 34 cents in 2004 and 48 cents in 2005. He set a $13.50 price target on the stock.