Synaptics rating cut by Oppenheimer as analyst warns on cell phone market share, prices
By APFriday, March 19, 2010
Ahead of the Bell: Synaptics cut by Oppenheimer
NEW YORK — Synaptics Inc. faces a shrinking market share and falling prices, an Oppenheimer & Co. analyst said Friday, cutting the company’s stock rating.
Oppenheimer’s Yair Reiner lowered Synaptics, a company that designs buttons, touch screens and other parts that people use to control electronic gadgets, to “Perform” from “Outperform” in a note to clients. He also removed his $35 price target.
Synaptics shares fell 39 cents, or 1.4 percent, to $27.27 ahead of regular trading Friday.
Reiner said the Santa Clara, Calif. company’s mobile business is losing market share and its average selling price is eroding.
“These factors are undercutting the lift Synaptics should be enjoying from the volume growth” in touch-screen handsets, he said.
Reiner said Synaptics may still benefit as a new market for touch-screen computers like Apple Inc.’s new iPad emerges and corporate customers replace older notebook PCs.
But he added, “With the critical handset segment likely heading for another set of downward revisions, we’d prefer to watch the next couple of innings from the bleachers.”
