National Semiconductor (NYSE:NSM) Positioned Strong for 2011

There may be some short-term pain for National Semiconductor (NYSE:NSM), but going into 2011 they seem positioned well for growth.

FBR noted, "Thursday, National reported weak calendar 4Q revenues and upside EPS, and it guided calendar 1Q revenues to fall 10% QOQ, worse than Street estimates, as wireless handset market share losses, customer market share losses, and some semiconductor cycle impacts drove near-term weakness. Indeed, our recent assessment of global supply chain inventories suggested that downstream inventory growth (dollars +9.5% QOQ in 3Q) would give way to an eventual shipment-based reset for chip firms through 1H11, with some of this now playing out...We are cutting our calendar 2011 EPS estimate from $1.40 to $1.25, introducing our calendar 2012 estimate of $1.40, and maintaining our rating and price target, based on a 14x target P/E multiple (2011, including stock compensation), seemingly appropriate, given National’s sustainable business model, margin profile, and peer valuations."

FBR Capital maintains an "Outperform" on National Semiconductor, which closed Friday at $13.81, down $1.16, or 7.75 percent. FBR has a price target of $20 on them.

Volume was about 4 times the daily 3-month average.