JP Morgan upgrades M-Sys Flash Disk Pioneers (FLSH) to overweight from neutral.
Analyst Sameer Doctor views the stock as significantly undervalued, despite risks around the adoption of MDoC. He expects the company to report 16 cents first-quarter earnings per share on $92.4 million in revenue on Apr. 20, compared with consensus estimates of 16 cents on $95.4 million, and guidance of at least 14 cents on more than $90 million.
He says gross margins should be in line, despite recent concerns on pricing pressures. He says M-Sys Flash Disk Pioneers entered the first quarter with a very clean inventory position, and an 8% to 10% quarter-over-quarter NAND flash ASP decline reported by Samsung is positive.
Doctor believes the next generation XBox could provide an upside to second-half 2005 numbers.