Spansion, Inc. (SPSN) is a semiconductor device company, engaged in designing, developing, manufacturing, marketing and selling flash memory solutions worldwide. We are initiating our Hold rating on the company.
March quarter results matched preannounced results. The NOR market is growing slower than its sister NAND market and the firm has seen operating expenses climb. SPSN did recently buy an intellectual property company called Saifun. Technology licensing could be a bright spot for the company that raises margins.
After falling from a 52-week high of $11.90 to the 2.50 range, we feel the bad news is currently priced into the stock. We feel the firm will trade at current to slightly higher valuation metrics until the 2008-2009 demand outlook becomes a little more clear. We are setting a price target of $3.00.
