CIBC is positive on RF Micro (NASDAQ:RFMD) saying their checks show that handset shipments at key customers are tracking well, particularly at top customer Nokia (NYSE:NOK). Adding to very strong PA shipments to Nokia, RFMD's Polaris 3 is starting to ramp at Nokia on newer EDGE, music oriented phones. RFMD is also seeing good traction at Samsung on more models than previously expected and an initial commercial volume ramp at new customer Sony Ericsson. RFMD is at the initial phase of a ramp at Sony Ericsson with RFMD moving from a sampling phase last quarter to its first and more meaningful commercial volume shipments this quarter
While checks still show flattish data points for Motorola handset shipments, the firm believes demand pull for components is at least in line with modest expectations built into RFMD's guidance. Heading into the key holiday buying season we could finally see some improvement.
CIBC is raising their 2Q08 (Sept. qtr) estimates for RFMD to the high end of guidance and reiterates of Sector Outperformer rating and $9 price target. Upside to their raised estimates is possible.
Notablecalls: I like this call. Very little positive has happened to RFMD over the past couple of years and CIBC's comments sound very refreshing. I feel a new cycle of more sophisticated phones (smartphones) is starting to develop and with higher ASP's RFMD will also benefit.
The stock is trading near recent lows and comments like this one may help to propel it higher. Note that CIBC's tgt offers 50% of upside. And it looks to me they are being conservative here. Expect to see upside in RFMD today and over the coming weeks. Actionable call alert!