I liked the statement that investors overreacted to the ruling and that they would be remiss to ignore current value, that the ruling does not compomise the likelihood of an eventual settlement. And .. quote...:
"We fully expect IDCC to ink additional 3G patent license agreements with handset manufacturers, including Nokia, with 80%
of devices licensed under IDCC intellectual property; thus, we find the stock’s valuation at less than 10x our 2010 EPS
estimate compelling. Our $36 price target is based on 15x our 2010 EPS estimate of $2.40; this multiple assumption is a
discount to our five-year EPS growth rate forecast of 18% in consideration of the extreme volatility, uncertainty and risk
surrounding IDCC’s litigious business model and resulting cash flows."
FYI - Their EPS est for 2010 is lower than consensus $2.50.
If you can get a 50% return you are doing better than Bernie Madoff without faking it. These price targets are usually conservative and are hit prior to the end of the price target horizon. The analyst scores points if he is right.