JP Morgan reiterated the overweight rating on Omnivision Technologies (OVTI).
Analyst Paul Coster says fourth-quarter EPS beat his above-consensus estimate by a penny. As expected, accounting issues appear benign in nature and appear to be resolved. He notes first-quarter guidance is reaffirmed. The market reacted negatively to this guidance originally, but he believes Omnivision is being conservative in view of uncertainty associated with a new chipset that moves into the higher-resolution DSC market.
Coster says there's not much doubt in his mind here. At 9.9 times the $1.60 calendar 2005 EPS estimate, Omnivision looks undervalued as the leading CMOS sensor provider. He upped the fiscal 2004 (Apr.) EPS estimate to $1.40, and upped the fiscal 2005 estimate to $1.62.