Emerson (EMR) (BKCC) (CRME) (SIMG) Get Ratings Upgrades

Shares of BlackRock Kelso (NASDAQ:BKCC), Cardiome Pharma (NASDAQ:CRME), Emerson (NYSE:EMR) and Silicon Image (NASDAQ:SIMG) all upgraded today by several brokerages.

BlackRock Kelso (BKCC) was upgraded by UBS (NYSE:UBS) from "Neutral" to "Buy."

Cardiome Pharma (CRME) was upgraded by RBC Capital Markets from "Sector Perform" to "Outperform."

Emerson (EMR) was upgraded by Oppenheimer from "Perform" to "Outperform."

Silicon Image (SIMG) was upgraded by Needham from "Hold" to "Buy." Silicon Image is soaring today, jumping to $8.48, gaining $0.92, or 12.17 percent, as of 2:56 PM EDT. Volume was over 3 times the 3-month daily average.

Philip Morris (PM) (FLIR) (HXL) (NFLX) (TCO) PTs Raised

The shares of Philip Morris (NYSE: PM), FLIR Systems, Inc. (NASDAQ: FLIR), Hexcel Co. (NYSE: HXL), Netflix, Inc. (NASDAQ: NFLX) and Taubman Centers Incorporated (NYSE: TCO) were all boosted April 26 by several analysts.

JPMorgan Chase & Co. (NYSE:JPM) raised its price target on FLIR Systems, Inc. (FLIR) to $34.00. They have a “Neutral” rating on the company.

Needham & Company increased its price target on Hexcel Co. (HXL) from $22.00 to $24.00. They have a “Buy” rating on the firm.

Morgan Keegan raised their price target on Netflix, Inc. (NFLX) from $220.00 to $267.00. They have a “Market Perform” rating on the stock.

Credit Suisse (NYSE:CS) raised their price target on Philip Morris (PM) from $64.00 to $72.00. They have an “Outperform” rating on PM.

Jefferies (NYSE:JEF) raised its price target on Taubman Centers Incorporated (TCO) from $52.00 to $56.00. They have a “Hold” rating on Taubman.

Riverbed Technology (NASDAQ:RVBD) in Multi-Growth Pattern for WAN

Riverbed Technology (NASDAQ:RVBD) is in a multi-year growth pattern for WAN acceleration, according to Needham, which remains positive on the company.

Needham says, "...We have conviction that RVBD is in a multi-year growth pattern for WAN acceleration, as the business driver of datacenter consolidation is still very strong (though years old as a driver). Complementing the “old driver” is cloud-services (large boxes) for both large enterprise and carrier, which is consistently 35-40% of license and accelerating at RVBD....After us being nervous for the MarQ seasonality, RVBD guidance has allayed those concerns, and we believe CY11 will be a strong revenue growth year for Riverbed, which we believe will be a 30%+ revenue grower, a 40%+ EPS grower, and also remains an M&A takeout candidate."

Needham & Company maintains a "Buy" rating on Riverbed Technology (RVBD), which was trading at $36.24, gaining $1.33, or 3.81 percent, as of 2:52 PM EST. Needham has a price target of $48 on Riverbed, boosting it from $32.

Bottomline Technologies (NASDAQ:EPAY) Shares Soar on Strongest Orders in History of Company

Shares of Bottomline Technologies (NASDAQ:EPAY) were up over 12 percent on the day, as they came of their best quarter for orders in the history of the company.

Needham says, "Bottomline posted by far the strongest orders quarter in the firm’s history, which is indicative of the strategic value that Bottomline provides its financial institution customers. Additionally, Q2’s robust orders activity provides Bottomline with incremental revenue visibility to a business that already has more than 85% visibility going into a quarter. We believe that EPAY shares could approach $30 within 12-18 months...We have increased our FY’11, ’12 and ’13 Non-GAAP Net Income estimates by $2.8 million, $1.6 million and $2.4 million respectively. The associated EPS impact is +$0.07, nil and nil respectively (zero EPS impact in fiscal years 2012 and 2013 due to accelerated share creep)."

Needham & Company maintains a 'Strong Buy' on Bottomline Technologies (EPAY), which was trading at $22.89, gaining $2.52, or 12.37 percent, as of 2:44 PM EST. Needham raised their price target on Bottomline from $25 to $28.

Immunogen's (NASDAQ:IMGN) Expectations Too High, as is Valuation

Immunogen's (NASDAQ:IMGN) valuation is too high, according to Needham, which is the result of expectations concerning late-stage T-DM1.

Needham says, "We believe the current valuation is built on high expectations for the late-stage T-DM1 along with the brand-name Roche (OTC:RHHBY) (N/R) partnership, but the value creation for ImmunoGen is modest, due to the mid-single digit royalty. Despite the best efforts of the management team, the remainder of the pipeline remains in a early stage and/or in the hands of the outside partners. We see few value-creating events in 2011 to support the current ~$470MM technology value. Accelerated progress in the earlystage internal pipeline or sizeable collaborations around the unpartnered pipeline products may provide an upside to our current valuation."

Needham & Company reiterates an "Underperform" rating on Immunogen Inc. (IMGN), which was trading at $8.17, down $0.62, or 6.95 percent, as of 2:33 PM EST.

Virtusa (NASDAQ:VRTU) Shares Have More Upside Says Needham

Virtusa's (NASDAQ:VRTU) third-quarter results were inline with the industry and peers, but Needham still sees more upside for the shares of the company.

Needham says, "VRTU posted Q3 results that were modestly ahead of our estimates and that were in-line with what Virtusa’s peers have reported in previous weeks. The demand environment is improving and this is reflected in our estimates. We believe that VRTU shares have more upside from here.

"Our Q4 revenue and EPS estimates are $58.3 million and $0.21 versus our previous estimates of $57.9 million and $0.20. Our FY’12 estimates are $250.0 million and $0.88 versus our previous estimates of $240.8 million and $0.88. We lose almost $0.03 as we estimate that VRTU’s FY’12 share count will be approximately 1 million shares higher than our previous estimate. Our FY’13 estimates are $286.3 million and $1.13 as compared to our previous estimates of $267.0 million and $1.10."

Needham & Company maintains a "Buy" rating on Virtusa (VRTU), which closed Thursday at $17.22, down $0.28, or 1.60 percent. Needham raised their price target on Virtusa from $20 to $21.

Harris (NYSE:HRS) Outlook for 2012 Looks Good

Harris Corp.'s (NYSE:HRS) RF Comm. business will suffer over the long term, after MRAPrelated sales ended, but should be sustainable at current levels on public safety and international business.

Needham says, "While concerns regarding the longer term growth prospects for the RF Comm. business are likely to linger in light of cessation of MRAPrelated sales, potential competition from JTRS programs of record, and broader concerns around declining DoD spending, we think international strength as well as growth of the public safety business should sustain the RF Comm. business at or near current levels over the medium term with overall growth driven by HRS’ increasing services businesses."

Needham & Company maintains a 'Buy' on Harris Corp. (HRS), which closed Thursday at $48.19, down $0.59, or 1.21 percent. Needham has a price target of $53 on Harris.

Citrix Systems (NASDAQ:CTXS) Driven by Trade Up Program

Citrix Systems (NASDAQ:CTXS) generated good results in its latest quarter, driven by the reintroduction of their "Trade Up" program, which will be implemented throughout 2011, driving revenue even more.

Needham says, "The Citrix results were strong for the DecQ, not unexpectedly, as the 'trade up' program was brought back at the end of the calendar year, and consistently helps revenue growth in the core CTXS business, which was up +14% y/y and +17% q/q. The closely followed subgrouping of Xendesktop (VDI) within the core business had $125m bookings in the DecQ, vs. $60m in SeptQ, and also benefited from upgrade promotions. It is our understanding that the “trade up” programs will now be renewed to last through the entire CY11, which we believe will drive core business results for the year. Our new CY12 estimates assume a moderation of growth, though, and assume the trade-ups will only last through CY11. Guidance for the CY11 was above consensus, though there were questions on the weak MarQ EPS (attributed to 1H11 dilution of Netviewer acquisition in Dec 10). We believe CTXS is poised for a solid CY11, though we believe shares are fairly valued at 4.3x EV/CY12 revenue and 21x P/E."

Needham & Company reiterates a "Hold" rating on Citrix Systems (CTXS), which was trading at $64.72, gaining $1.21, or 1.91 percent.

Supertex's (NASDAQ:SUPX) Growth Outlook Remains Cloudy

Supertex (NASDAQ:SUPX) will be buying back up to 2.5 million shares, which should boost the stock price, but other than that, says Needham, the growth outlook for the company remains cloudy.

Needham says, "This is the most relevant point in our view as management is committed to buy back up to 2.5M shares to reduce shares outstanding to about 11M from today's 13M. We are conservatively modeling share count to drop to 12.5M by FY13 and concede there is upside to our numbers on the share buyback alone...We lowered FY12 revenue/EPS from $96M/$1.35 to $87M/$1.25 and introduced our FY13 revenue/EPS estimate at $91M/$1.30. While we expect upward pressure on SUPX shares due to the buyback the growth outlook remains cloudy."

Needham & Company reiterates a "Hold" rating on Supertex (SUPX), which closed Wednesday at $23.01, gaining $1.45, or 6.73 percent.

Fortinet (NASDAQ:FTNT) Soars at it Exceeds Expectations in Several Categories

The share price of Fortinet Inc. (NASDAQ:FTNT) was rocking today, as the company beat expectations in a number of categories for the quarter.

Needham says, "The Fortinet DecQ results were better than expected, beating on billings, revenue and EPS. Guidance for both MarQ and CY11 was above consensus, and demonstrated how Fortinet is gaining momentum in its key markets of large enterprise and telco service providers. We believe Fortinet is increasingly viewed as a “safe” solution, as potential customers become aware of the growing market presence and strong financial results of FTNT, a relative newcomer in security and UTM software appliances. Looking into CY11, we believe the secular trends which favor Fortinet should continue, including: increased enterprise adoption of “all in one” security appliances; increasing appetite among telcos for FTNT equipment to enable “hosted cloud services”; overall growth of spending on network security in enterprises. CY11 guidance is above consensus, and reflects FTNT’s confidence in accelerating traction among enterprise and telco customers.

"MarQ guidance was above consensus revenue and bracketed EPS. CY11 outlook of $370-385m and $0.62-0.64 EPS is above consensus $371m and $0.59. We are raising our CY11 to $383m and $0.64 EPS; introducing CY12 of $446m revenue and $0.77 EPS."

Needham & Company maintains a "Buy" rating on Fortinet (FTNT), which was trading at $38.92, gaining $5.00, or 14.74 percent, as of 1:59 PM EST. Needham raised their price target on Fortinet from $38 to $44.

Wait on Mindspeed (NASDAQ:MSPD) Until Revenue Recovery Confirmed Says Needham

Mindspeed (NASDAQ:MSPD) seems to have turned the corner, but Needham suggests investors wait on the sidelines until confirmation revenue recovery for them is a reality.

Needham says, "MSPD reported F1Q11 results in-line with its pre-announcement and guided F2Q11 below consensus but inline with our expectations...With its legacy WAN business likely to stabilize at lower levels and with MSPD’s core CCP and HPA businesses likely to grow in FY11, we believe total revenue has turned the corner after bottoming late in CY10. However, we remain concerned that consensus estimates may be overestimating the revenue recovery over the next several quarters, especially with Transcede not likely to ramp until late FY12. Our FY11 and FY12 estimates remain below the current consensus estimates. As such, we reiterate our rating and would remain on the sidelines until revenue visibility increases."

Needham & Company reiterates a "Hold" rating on Mindspeed Technologies (MSPD), which closed Tuesday at $7.02, up $0.02, or 0.29 percent.

Buy Volterra Semiconductor (NASDAQ:VLTR) on Weakness Advises Needham

Volterra Semiconductor's (NASDAQ:VLTR) revenue and earnings for the latest quarter came in as expected, and Needham recommends the company be bought on weakness going forward.

Needham says, "VLTR reported Q4 revenue and EPS in line with its pre-announced range and provided an in line Q1 guide for both revenue and EPS. Volterra has 80% backlog coverage for Q1, sees visibility improving and believes the server inventory correction has passed. Topping the list of concerns was a potential shift towards lower GM as Notebook revenue picks up. This was prompted by guidance for a 100 bps downtick for Q1 before reversing as higher GM server revenue contributes more to the mix. This risk is overrated in our view, as is inventory build, which is obviously for the upcoming notebook ramp. The revenue split between Notebook and Server is similar to our forecast with the same Q/Q expectations for Q1 that Notebook would grow and Server decline. The Huron River (Notebook) ramp is starting off better than mgmt originally anticipated and Romley (Server) is still targeted for a Q3 ramp.

"We lowered our 2011 revenue/EPS from $173M/$1.55 to $169M/$1.35 and our 2012 revenue/EPS from $203M/$2.20 to $203M/$2.10. Our 2011 reductions are due to slightly lower GM and OM on a 2% revenue decline whereas 2012 is due to an increase in litigation expense."

Needham & Company reiterates a "Strong Buy" rating on Volterra Semiconductor (VLTR), which closed at $24.18, down $0.63, or 2.54 percent. Needham lowered their price target on Volterra from $35 to $33.

VMware (NYSE:VMW) Remains Attractive on "Cloud Computing" Secular Trend

After the earnings season is over, Needham expects investors to flock back to VMware (NYSE:VMW), saying that cloud computing infrastructure remains among the strongest secular trends for software.

Needham says, "We believe VMware continues to be in the middle of a secular trend towards virtualization of IT infrastructure. It is our sense CY10-11 is the year of 'build-out' for public and private cloud infrastructure, suggesting we are still in early stages of license consumption in a multi-year trend. We believe investors will move back to VMW shares, post earnings season, as the attractiveness of “cloud computing” infrastructure (VMW, Riverbed Tech (Nasdaq:RVBD), others) remains one of the best secular trends in software...Our estimates for CY11 go from $3380m and $1.86 to $3507m and $1.86 EPS; introducing CY12 of $4000m and $2.20 EPS."

Needham & Company maintains a "Buy" rating on VMware (VMW), which closed Tuesday at $84.28, down $3.45, or 3.93 percent. Needham boosted their price target on VMWare from $90 to $95.

Most News Corp. (NASDAQ:NWS) Segments' EPS Lowered

News Corp. (NASDAQ:NWS) had five of its six operating divisions' EPS estimates lowered by Needham, which still maintained their "Buy" rating on the media giant.

Needham says, "(For Q2) We are maintaining our revenue estimate of $8.625B, (down 1% y/y) but we are lowering our EBIT outlook by 11% to $1.212B, flat y/y. We are lowering our expectations in 5 of NWSA’s 6 operating divisions. In Filmed Entertainment, we are lowering our expectations for Segment EBIT by 26% to $177M to reflect the lack of big hits at the box office to start this fiscal year, resulting in lower than expected sales in DVD for the quarter. In Television, we are lowering our estimates for Segment EBIT by 9% to $137M to reflect lower than expected ratings, resulting in lower than expected scatter pricing. In Cable Networks, we are lowering our estimates for Segment EBIT by 3% to $689M to reflect a solid ad market, but less growth than expected. In Publishing, we are lowering our estimates for Segment EBIT 10% to $370M to reflect ad sales below our expectations. In Other, we are lowering our estimates for a loss to $150M, from a loss of $130M, to reflect continued spending and a slower pace in monetizing results in this segment.

"We are maintaining our revenue estimates for 2H2011, but we are lowering our EPS to $1.11, from $1.16, to reflect the changes in 2Q11E discussed above."

News Corp. closed Tuesday at $17.30, down $0.07, or 0.40 percent.

Cubist Pharmaceuticals (NASDAQ:CBST) Driven by Teva Litigation

The narrative going forward for Cubist Pharmaceuticals (NASDAQ:CBST) will primarily be litigation with Teva, and not the rate of growth of Cubicin in 2011; at least for the next several months.

Needham says, "Management appears to have cautiously optimistic expectations for a number of recent and to-be-implemented marketing efforts designed to maintain Cubicin growth in 2011. Our new 2011 U.S. Cubicin sales estimate is $657.0MM. Notwithstanding somewhat low Cubicin sales guidance for this year, litigation with Teva is likely to drive the stock for the next several months. We are generally favorably inclined and believe there is an attractive risk benefit at the stock’s current valuation ($900MM EV).

"Our 2011 and 2012 total revenue estimates are $693.9 (was $697.0MM) and $761.0MM (was $762.0MM). Our new 2011 and 2012 GAAP EPS estimates are $0.85 (was $1.66) and $1.29 (was $1.81), respectively, reflecting accounting items tied to convertible notes and the Calixa earn-out."

Needham & Company maintains a "Buy" rating on Cubist Pharmaceuticals (CBST), which closed Friday at $22.21, gaining $1.01, or 4.76 percent. Needham has a price target on Cubist of $27.

Synaptics (NASDAQ:SYNA) Downgraded on Move Away From Modules

Synaptics (NASDAQ:SYNA) was downgraded by Needham & Company, citing what appears to be a move away from modules chip-only solutions.

Needham says, "Our downgrade is not based on near term results, which were roughly inline, but rather our long term concern that the capacitive touch market has moved rapidly away from modules to chip-only solutions. For the first time in 18-months, mgt. acknowledged that the current design win pipeline is overwhelmingly chip-only and in the future will accelerate with the adoption of on-sale and in-sale implementations (i.e. ITO sensor embedded directly into the LCD stack). With mgt. unable to provide details on the pricing impact of this transition, we believe SYNA’s ASPs could realistically fall over 50% Y/Y or more in FY12, negating any unit growth."

Needham & Company downgraded Synaptics (SYNA) from "Hold" to "Underperform." Synaptics closed Friday at $28.55, down $3.50, or 10.92 percent.

Google (NASDAQ:GOOG) Remains Solid, New Growth in Mobile, Display

Google (NASDAQ:GOOG), while continuing to perform well in search, has that solid foundation to work from as the enter into new growth markets like mobile and display.

Needham says, "We continue to be impressed w/revenue trends and new-growth opportunities like display and mobile, and as such, we are increasing our estimates, but note that we expect topline growth to be tempered in the near-term by a continued ramp in growth investments...Our CY11 net revenue, adj. EBITDA, adj. EPS ests increase to $26.69BN, $15.73BN and $34.46, respectively."

Needham & Company maintains a "Buy" rating on Google (GOOG), which was trading at $625.69, down $1.08, or 0.17 percent, as of 12:06 PM EST. Needham has a price target on Google of $700.

Flextronics (NASDAQ:FLEX) Continues to Deliver Top-Line Growth

Flextronics (NASDAQ:FLEX) looks good going forward, according to Needham, citing its diverse customer base and end markets as major catalysts.

Needham says, "Overall, Flextronics continues to execute as its diverse customer base and end markets remain well positioned to capture a healthy share of new business and drive solid top-line growth. Further, with the company still seeing solid growth prospects and an improving Components business, we suspect our estimates could be conservative.

"For F4Q, our estimates become $7.25B and $0.22, vs. our previous forecast of $7.0B and $0.20 (ex. opt.). Our F11 estimates now $29.1B and $0.88, vs. our previous $28.6B and $0.85. Modifying F12 of $30.6B & $0.96 to $31.8B and $1.04."

Needham & Company maintains a "Buy" on Flextronics (FLEX), which was trading at $8.15, down $0.07, or 0.85 percent, as of 11:59 AM EST.

Silicon Image (NASDAQ:SIMG) Business Model Driving Share Gains

Silicon Image (NASDAQ:SIMG) has a business model which is driving share gains and are at the beginning of a multi-year product cycle, says Needham, which sees the company's share value growing over 30 percent.

Needham says, "Last week, SIMG’s CEO (Camillo Martino) and CFO (Noland Granberry) presented at the Needham 13th Annual Growth Conference. In our opinion, there were three notable items from the conference: 1) SIMG added a new HDMI DTV customer (we think LG-N/R); 2) introduced ViaPort technology to further differentiate from the SoCs; and 3) cable attach rates for MHL could add incremental revenues. Broadly, SIMG is in the first inning of a multi-year product cycle in mobile- DTV connectivity. In fact, we believe MHL could be a defacto standard on the majority of smartphones over the next 2-3 years. Moreover SIMG’s innovative standard-plus business model is driving share gains and growth in the DTV market. With the stock trading at a compelling valuation and multiple growth drivers, we continue to see value for the shares north of 30%...We are introducing our 2012 estimates of $270MM/$0.55. Our 2011 estimates of $220MM/$0.35 remain unchanged."

Needham & Company reiterates a "Buy" rating on Silicon Image (SIMG), which closed Wednesday at $7.27 gaining $0.32, or 4.60 percent. Needham boosted their price target on Silicon Image from $7 to $10.

Needham Sees Cypress Semi (NASDAQ:CY) Shares Up 20 Percent

Cypress Semi (NASDAQ:CY) appears to be forming a strong "touch" story in 2011 and forward, says Needham, along with solid product cycles.

Needham says, "Last week, CY’s CFO (Brad Buss) presented at the Needham 13th Annual Growth Conference. In our opinion, there were four notable items from the conference: 1) TrueTouch is gaining momentum; 2) rolling out single-chip for tablets; 3) expanding touch capacity to support demand throughout 2011; and 4) sales funnel for new products (PSoC3/5) ramping well. We believe CY is at the forefront a multi-year secular story in capacitive touch along with solid product cycles to boot. We see continued value for the shares north of 20%...We are introducing 2012 Non-GAAP estimates of $1.20BN/$1.70. Our 2011 estimates remain unchanged."

Needham & Company reiterates a "Buy" rating on Cypress Semi (CY), which was trading at $21.25, up $0.10, or 0.47 percent, as of 11:21 AM EST. Needham raised their price target on Cypress from $20 to $26.