QLogic upgraded to "outperform"

05/08/07 - Morgan Keegan

NEW YORK, May 8 (newratings.com) - Analysts at Morgan Keegan upgrade QLogic Corporation (QLGC) to "outperform."

In a research note published yesterday, the analysts mention that QLogic’s fundamentals appear to be bottoming, and the company is likely to resume generating robust sequential growth in 2H07. This growth would be driven by a sustained ramp of InfiniBand products, a substantial recovery in the switch business due to SANbox 9000, and the recommencement of growth in the core HBA arena, the analysts say. Gross margins generated by the InfiniBand products are likely to expand from 26% in the March quarter to 45%-50% by the end of the year, and significantly boost QLogic’s overall margin expansion in the year, Morgan Keegan adds.