JP Morgan upgrades Plantronics (PLT) to overweight from neutral.
Analyst Paul Coster says the company's office headset business is on track for a stronger quarter owing to deeper penetration of the end-market. Even though expectations for a seasonally weak fourth-quarter remains unchanged, the company is incrementally positive regarding fiscal 2006 (ending March) outlook owing to strength in office segment, a firming labor market, and indications enterprise IT spending remains robust.
Coster ups his fiscal 2006 earnings per share estimate 7 cents to $2.02. Although transitional risks persist, he likes the risk-return trade-off.
Trading at about 19 times his calendar year 2005 earnings per share estimate and at a 14% discount to the 5-year forward average, he believes the valuation is attractive.