SYNA - Synaptics Inc.: F1Q10 Preview: Low Expectations Seem Priced In - We believe negative sentiment regarding smartphone market share loss and an industry-wide shift from module to chip-based solutions, is priced into this stock and with short interest at 8 days heading into F1Q we believe in-line results and guidance, buoyed by demand from PC applications, could support near-term appreciation. Maintain Overweight. We expect F1Q10 PF EPS of $0.43 on revenue of $115.7mm compared to consensus of $0.42 on sales of $116.4mm. We forecast PC-related revenue of $61.8mm, down 26% y/y, and $53.8mm of digital lifestyle revenues, up 66% y/y. SYNA is trading at 9.2 times our CY10E PF EPS of $2.34, a 60% discount to the mean of our coverage, and a PEG of 0.6 versus our forecast for a 16.0% EPS CAGR. We think this multiple is attractive, though we believe positive catalysts are absent in the next few months and we are growing concerned that competitive pressure could weigh on ASPs and margins. Our December 2010 Price Target is $38.00 based on a multiple of 15x CY11 PF EPS. The multiple is a slight discount to the mean of our coverage reflecting the increased risks in this stock.