Goldman Sachs Positive on CommTech (CSCO, QCOM, RIMM, PWAV)

Goldman Sachs has come out with some positive calls in the communications technology group, and one of the stocks has been given an upgrade. 

Specifically, Goldman Sachs noted that it is maintaining a bias toward the large-cap stocks in the communications tech universe with stocks like Cisco Systems (NASDAQ: CSCO), Qualcomm (NASDAQ: QCOM), and Research-in-Motion (NASDAQ: RIMM).  The firm is starting to see some opportunities in small-caps in the sector and the firm has listed Powerwave (NASDAQ: PWAV) as its top idea.

PowerWave was RAISED TO BUY FROM NEUTRAL and it has a premium over Wall Street’s consensus estimates for 2008 and 2009.  The firm believes that PowerWave can grow its top-line at least 10% over the next 2 to 3 years. Price target is $5.30, about 30% above current levels.

The firm noted that Small-cap stocks in its CommTech coverage are down 36% so far in 2008 and down 19% in June. Goldman Sachs believes this current underperformance is due to their greater sensitivity to macro headwinds as customers consolidate around larger vendors, and rising investor risk aversion.

Jon C. Ogg
June 30, 2008