Plantronics: J.P. Morgan Upgrades; Post-Recession Play

J.P. Morgan analyst Paul Coster this morning raised his rating on Plantronics (PLT) to Overweight from Neutral, with a new price target of $24, up from $18. “We believe PLT will emerge from the recession with a stronger franchise, poised to benefit from growth in unified communications,” he writes in a research note.

Coster notes that the company posted better-than-expected results for the March quarter, and that PLT has $4.50 a share in cash, no debt and has been cash-flow positive for 14 years. He says the company’s headset franchise is strengthening during the recession, with share gains in the retail Bluetooth headset market. Coster adds that recent restructuring should yield operating margin improvement with restored growth.

Coster contends the addressable market for unified communications headsets is more than 100 million, or $1.2 billion by 2014.

Coster sees long-term pro forma EPS growth - through FY 2015 - of 18%, on 8% revenue growth.

PLT today is up 38 cents, or 2.1%, to $18.26.