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OmniVision Slammed by Weak Forecast, Price-Target Cuts

Three brokerages cut their price targets on OVTI

by 11/30/2011 12:00:34 PM
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After the close last night, OmniVision Technologies, Inc. (OVTI - 10.27) unveiled stronger-than-expected results for its fiscal second quarter, but offered a disappointing third-quarter forecast. This morning, at least three brokerages weighed in on OVTI: Baird cut its target to $11 from $13; Canaccord lowered its price target by $6 to $12; and Lazard decreased its target by $7 to $15.

There could be additional price-target reductions in store for OVTI. Thomson Reuters places the average 12-month price target at $16.81, which represents a hefty 65.6% premium to today's new two-year low of $10.15, tagged earlier in the session.

Otherwise, the brokerage bunch is split toward the semiconductor devices developer. Zacks is reporting four "strong buys" and one "buy" suggestion, compared to five tepid "holds" and not a single "sell" recommendation.

Elsewhere, despite depleting by 16.1% during the most recent reporting period, short interest still accounts for nearly 10% of the security's float. However, it would take just over one day to buy back all of these pessimistic positions, at the stock's average pace of trading.

The options crowd also appears to be pessimistic toward the stock, as evidenced by the stock's 10-day put/call volume ratio of 0.77 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio arrives in the 90th percentile of its annual range -- 10 percentage points from a pessimistic peak -- signaling that traders on these exchanges have rarely purchased bearish bets over bullish at a faster pace during the past year.

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