Baird Slashes Syntax-Brillian Target On LCD Panel Shortage

Tristan Gerra, an analyst at Robert W. Baird, this morning cut his rating on flat panel television maker Syntax-Brillian (BRLC) to Neutral from Outperform, and sharply reduced hits earnings outlook for the company.

The downgrade, he says, is related to “a potential cash tightness situation late this year…due to Syntax-Brillian’s continued intensity in working capital requirements during the seasonally strong December quarter compounded by higher TFT LCD panel prices.”

Gerra notes that there is a “severe shortage” of LCD panels, with pricing likely to increase over the next few quarters. Gerra adds that he has confirmed the company’s recent assertion that there is a credit crunch for component suppliers in Taiwan. He says that the trouble is related in part to “the fall” of Taiwan TV maker Ya-Hsin a few months ago. “Local banks responded by tightening credit particularly for local businesses with U.S. exposure,” he writes. “While we have limited visibility on the credit risk of Syntax-Brillian’s supply chain partners, we believe some of them are significantly leveraged and represent an additional risk to the business model.”

Meanwhile, he also said that there are “signs of inventory accumulation” of tier-one TV brands in the U.S., while lesser brands - including Syntax-Brillian’s Olevia - remain strong.

Gerra cut his price target on the stock to $4 from $12.

He cut his EPS estimate for the June 2008 fiscal year to 36 cents from 66 cents.

Syntax-Brillian today is down 15 cents at $3.91.

Comments

[Rocketrade:]

Syntax-Brillian "buy," estimates raised

Tuesday, October 02, 2007 9:35:53 AM ET
Brean Murray, Carret & Co

NEW YORK, October 2 (newratings.com) - Analyst Michael HV Tieu of Brean Murray maintains his "buy" rating on Syntax-Brillian Corporation (ticker: BRLC), while raising his estimates for the company. The target price is set to $8.

In a research note published this morning, the analyst mentions that there is improved optimism regarding the company’s execution of its growth strategy, following James Li’s promotion to the position of CEO. Syntax-Brillian’s ability to finance the upcoming holiday season is expected to have improved significantly, since the company has received support of an additional supplier in Asia and entered into favourable payment terms with retailers, the analyst adds. The EPS estimate for 2008 has been raised from $0.70 to $0.76.

www.newratings.com/ana...

Please be fair in your reporting unless your're a shortie!

2007 Oct 02 06:18 PM

[eninenin:]

This shall be another embarassment for Tristan Gerra and Robert W. Baird.

Look at the effects of their rating for OVTI:
tinyurl.com/3a7kvq

2007 Oct 02 09:01 PM

[RC Martin:]

Amazing, simply amazing. Mr Gerra is suddenly alarmed and concerned about a "potential" cash tightness later this year so he's cut the stock from his $12 target to $4.

But wait, hold everything, didn't Mr Gerra realize, being a "Professional" analyst, that while he was tootin and toutin Syntax-Brillian and held a view of $12 as a target, the firm was virtually wandering Asia with a beggar's cup looking for working capital. Doing $10MM and $20 Private Placements and Bridge loans to remain solvent. At that time he was calling for $12, doesn't quite seem as though he understood finance back then.

But hold on, doesn't seem he understands it any better today either because since the time he was tootin $12 the firm has raised $165MM from equity sales and collected $129MM in Asian receivables for an influx of $294MM, $294MM of fresh cash they didn't have when he was a raging bull calling for $12 but he's worried about a cash tight potential sometime maybe in the future we don't know if it will even happen, now.

How can anyone managing money take someone seriously with presentations of that sort. That I believe to be imbecilic. Virtually insolvent he's a bull calling for $12, with roughly $300MM fresh money and a new high powered Director he's frightened ansd worried and cuts his target by 66%.

Where did this Professional learn finance anyway?
The entire foundation of his analysis is hallucination I think. Hey its just an opinion sorta like the fairytales he passes off as analysis. Anyone who follows his advice is doomed, Oh by the way Sandy Sanmina is long Brillian and comfortable knowing that $4 is an earlty Santa gift. 2007 sales were $700MM despite the blunders and cash starvation, I look forward to 2008 being more like $1-1.2B and earnings per share in the 55-60¢ area. But what would I know, nobody pays me for my analysis and I don't belong to the CFA,Clowns, Fools and Addle-Brain club.

2007 Oct 02 10:48 PM

[eninenin:]

Well said! Sandy.

Tristan also just got the "Closing the Barn Door" award at :

collegeanalysts.com/?p...

2007 Oct 06 09:35 AM

[mlkr:]

Sandy Sanmina in yahoo BRLC bashes the stock. Samuel Sanmina , most likely the husband, bashes it. Can alpha look into this conflict of interest issue?

2007 Oct 06 01:26 PM

[eegorr:]

No comments on our big move on Friday?

2007 Oct 07 04:22 PM