Barclays Capital Report (11/28/2012) - "U.S. Wireless Equipment; Disruptive Mobility 4: Handset Vendors" is now at WirelessLedger.com.
Price Target: USD 40.00 (raised $15, or 60%)
View/Download PDF Report: http://bit.ly/QqfTNx
InterDigital: We adjust our price target to include the potential for patent portfolio sales in 2013 and beyond. We increasingly view IDCC's valuation as a SoTP analysis combining cash on the balance sheet, potential increases in cash from patent portfolio sales as well as new fixed fee licensees and lastly per unit licensing revenue from new contract wins. In conjunction with IDCC's announced strategy to monetize the patent portfolio, management has identified approximately 3K patents that could be sold to a third party. We believe an outright sale, or a partnership to monetize this slice of the portfolio, while adding to the new R&D program is possible. We use IDCC's recent patent sale to Intel for $375 as a proxy, while applying a discount given our view on IDCC's remaining patent portfolio. Our new target is ~$40. Our prior target of $25 was based on 17x prior CY13 EPS of $0.64 plus ~$14 per share in cash.
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