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US / NASDAQ / InterDigital Communications


InterDigital Communications upgraded to "buy"

Friday, March 12, 2004 6:58:54 AM ET
Hilliard Lyons

NEW YORK, March 12 (New Ratings) - Analyst Tom Carpenter of Hilliard Lyons upgrades InterDigital Communications Corporation from "neutral" to "buy." The target price is set to $26.

Shares of InterDigital Communications, a company that develops wireless technologies and voice and data communication products, are currently trading at $18.85.

According to Hilliard Lyons' research note published yesterday, the company's 4Q03 revenue and EPS results were below expectations. A software glitch at one of the company’s main licensees, NEC, led to InterDigital's unimpressive performance during 4Q03, the analyst says. Hilliard Lyons mentions, however, that the worst is now over for InterDigital, the company’s performance is likely to improve in the near-term. The analyst cites expectations of an improved business scenario for InterDigital in the near-term as the reason for the current upgrade in rating.

Hilliard Lyons mentions that the key factor behind InterDigital's recent sell-off was the delay in the Nokia arbitration. The Nokia arbitration was likely to be finalized in 2H04, the analyst states. Hilliard Llyons adds that InterDigital's management hinted that a hearing in the Nokia arbitration is scheduled for January 2005. Hilliard Lyons cites fresh licenses, increased acceptance of InterDigital's products and positive news from either the Nokia or the Samsung arbitration as possible near-term catalysts for the company's stock valuation.

The EPS estimates for 2004 and 2005 are $-0.12 and $1.04, respectively. The P/E estimate for 2005 is 18x.

Hilliard Lyons upgrades InterDigital Communications from "neutral" to "buy."

© 2004 New Ratings


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