BRIEF: UBS upgrades Mellanox
Jan 15, 2013 (Globes - McClatchy-Tribune Information Services via COMTEX) --
UBS has upgraded its recommendation for battered technology stock Mellanox to "Buy", with a $65 price target. This compares with a closing price of $50.51 in New York yesterday. The share price has fallen from a peak of $120 in September last year.
"We believe the risk-reward for Mellanox is compelling and upgrade to a Buy with a new $65 price target. We are above consensus for 2013 and believe the stock downside is limited. We are bullish on InfiniBand adoption and are willing to look past the recent cabling issue and moderate demand weakness," says UBS.
"InfiniBand, which dominates high-performance computing, is moving into Web 2.0 and mainstream enterprises. For now, Mellanox is the only game in town with an 85-90 percent share. Top-line growth should be 18 percent in 2013 following last year's 92 percent driven by server upgrades to Romley. Also, InfiniBand should take share from Fibre Channel in storage as flash requires faster interconnect speeds. Intel's expected entry is the major risk though we expect Mellanox to remain competitive."
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