Shares of camera sensor maker OmniVision Technologies (OVTI) are up 21 cents, or 1%, at $19.64 in an otherwise lackluster market after Needham & Co.’s Rajvindra Gill this morning raised his rating on the shares to Buy from Hold, with a $24 price target, writing that the news from teardowns last week of Apple‘s (AAPL) newest iPad showing OmniVision won the slots for the front and back cameras in the device suggest “the upside to revenues and earnings would be significant.”
According to Chipworks, “Apple has recycled the 5MP back illuminated CMOS image sensor from the iPhone 4. That unit was the Omnivision OV5650. The OV5650 is the second-generation back illumination (BSI) technology from OmniVision. This 5MP camera features 1.75 μm pixels, and is designed to deliver DSC quality in a mobile phone application.”
The company could see a $3.28 per piece average price across the sensors, producing iPad revenue of $191 million in the fiscal year that ends April of 2013, Gill thinks.
Gill sees OmniVision being a contender for the cameras in an “iPhone 5,” though the outcome is uncertain at this point.
Gill raised his 2012 estimate for OmniVision to $889 million in revenue and $1.66 in EPS from a prior $884 million and $1.64, and for 2013 he now sees $975 million and $1.60 a share, up from $920 million and $1.35.