Lehman’s C.J. Muse yesterday morning cut his rating on Genesis Microchip (GNSS) to Equal Weight from Overweight, and reduced his price target on the stock to $10 from $12.
“With shares up 25% since troughing in March, supported partially on takeover speculation, coupled with our view that risk is to the downside heading into seasonally weaker 2Q as well as ongoing execution risk, we are moving to the sidelines…[we] simply can’t recommend on takeover speculation alone and see no positive near to medium term catalysts ahead,” he wrote in a research note.
Muse also slightly reduced earnings estimates, citing “incremental” share loss in digital television chips.
Genesis yesterday morning was down 27 cents at $9.34.