Deutsche analyst Brian Thackray believes Dolby’s (DLB) strong Q2 results highlight the leverage of its business model.
Dolby’s technologies are going on more devices and more of its technologies are going on each device. These factors are driving out- performance, even in a slowing economic environment.
Thackray is understandably concerned that consumer electronics spending may lag and therefore believes the stock’s outperformance is tied to further broadcast penetration, adoption of Bluray, and success in the mobile market.
Deutsche maintains BUY on Dolby (DLB), target $54.
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