J.P. Morgan Reiterates Overweight On PMC-Sierra

J.P. Morgan Chase & Co. is reiterating its Overweight rating and $10 price target on shares of PMC-Sierra PMCS. In a note to clients, J.P. Morgan writes, "We held meetings with PMCS's CFO, Michael Zellner, this week, and we came away feeling that 2Q is tracking solidly to plan (+4-9% Q/Q growth) with backlog visibility improving into the 2H and a record quarter for storage revenues in the Jun-Q. With the inventory correction behind the company, management is confident about the growth drivers (enterprise storage, optical, wireless infrastructure) going forward driven by a combination of positive end-market fundamentals (4G infrastructure deployments, broadband FTTH global deployments, storage conversion to SAS-2, continued packetization of wired networks) and new product/customer ramps. The company is confident about getting back to its OPM target range (25-30%) in 2H11 driven by a combination of revenue growth and disciplined opex spending." Shares of PMCS lost 14 cents yesterday to close at $7.26.