Citigroup upgrades PortalPlayer (PLAY) to buy from hold.
Analyst Glen Yeung believes PortalPlayer stock is oversold. At 22 times his forward earnings per share estimate (second-half of 2005 and first-half of 2006) PortalPlayer is a compelling value given the firm's dramatic growth outlook.
He believes the fourth-quarter was strong for PortalPlayer, and the first-quarter 2005 is likely tracking better than seasonal. He maintains 64 cents 2004 earnings per share estimates and 84 cents 2005 earnings per share estimates. However, he concedes his near-term estimates may be too low.
Yeung thinks investors should buy the stock now, ahead of what should be strong earnings per share report. He notes the company's PP5020 has been shipping for over year, and expects a new product announcement could be imminent. He has a $30 target.