JPMorgan has again picked NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) as one of its top three technology picks, but dropped Zoran Corp. (Nasdaq: ZRAN).
JPMorgan analyst Paul Coster gives NICE an "Overweight" recommendation with a target price of $38.50, thanks to its strong growth in orders. Although he dropped Zoran as a stock pick, he reiterated his "Overweight" recommendation for the share.
Coster says that NICE's 20% growth in orders in the fourth quarter 2009, compared with the corresponding quarter, is carrying over into the first quarter of 2010. "The Actimize business is driving a good portion of the growth, which could provide potential upside to NICE’s margins. The segment enjoys margins above the corporate average and could expand further with scale. We also believe that NICE has more mega deals in the pipeline within the security segment beyond the 8-digit deals already announced."
Coster cautions that the transition to a new CEO at NICE "introduces a modest risk to operations." Former CEO Haim Shani accepted an appointment as director general of the Ministry of Finance in September 2009, and was replaced by Zeev Bregman, who formerly served as CEO of Comverse Technology Inc. (Pink Sheets: CMVT) unit Comverse Inc.
Coster dumped Zoran from his technology stock picks because, in his opinion, the share's 9.4% fall in April made it "rough month for our short-term buy ideas" and there were better short-term opportunities.
NICE's share closed at $31.81 on Nasdaq on Friday, giving a market cap of $1.97 billion. The share price fell 0.3% by midday on the TASE today to NIS 117.60. Zoran's share closed at $9.75 on Nasdaq on Friday, giving a market cap of $499 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 3, 2010
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