From Standard & Poor's Equity ResearchMorgan Keegan downgraded Sirenza Microdevices (SMDI
) to market perform from outperform, noting concern about the company's third quarter performance.
Analyst Harsh Kumar says he's been picking up signs of a slowdown in the wireless base station market. He does not believe Sirenza is at risk of missing second quarter Street expectations of 12 cents earnings per share (EPS) on $35.3 million revenue, but thinks expectations for third quarter EPS of 14 cents on $38.5 million revenue could be the issue. He says that despite the recent pull back, Sirenza Microdevices still commands an ex-cash multiple of 19 times his 48 cents 2006 EPS estimate, toward the high end of the valuation range for semiconductor companies.