JP Morgan Comments On National Instruments Following Recent Earnings Release

National Instruments NATI March results and June guidance came in slightly below JP Morgan's optimistic estimates. NATI's guidance factors in a potential demand shock to the global PMI, driven by Japan natural disasters. The pothole in the guidance represents a buying opportunity. Currently, JP Morgan expects a V- shaped recovery in global production trends, with improvement starting in 2Q/3Q timeframe. This dynamic modestly weighs on its NATI estimates in the near term, but it does not change the positive view on the stock or $36.50 PT. March results and June guidance came in slightly below our optimistic estimates. June guidance was conservative, reflecting signs of softening in the global manufacturing PMI and NI's exposure to the automotive sector. While National Instruments saw negligible impact on March from the Japan catastrophe, the company expects Japan to have an impact on 2Q/3Q. JP Morgan thinks it is important for investors to determine if the global manufacturing PMI is going to rollover, driven by Japan and other economic issues. In the interim, JP Morgan thinks that investors will look to NI's peer earnings' reports for incremental updates on secular trends in T&M and the Japan recovery. JP Morgan has an Overweight rating on National Instruments NATI closed Thursday at $32.31