Analyst Ralph Garcea maintains Strong Buy on Wi-LAN, raises target to $7.00

Wi-LAN’s (TSX:WIN) case against Apple began yesterday in Texas, and analyst Ralph Garcea says there is a chance that the Cupertino-based tech giant will settle in court.

In a research update to clients yesterday, Garcea maintained his STRONG BUY rating on Wi-LAN, but raised his one-year price target to $7.00, up from his previous $5.50 target.

While Wi-LAN had a lot on its docket to begin 2013, the company’s year is beginning to be characterized by settlements that are having he net effect of lowering its litigation costs and increasing its royalties, says Garcea. While the company did face a set back in its case against Alcatel Lucent, Ericsson, HTC, and Sony in July, the Global Maxfin Capital analyst notes that the company has signed recent licensing deals and litigation dismissal announcements with Samsung, Alcatel, HTC, BlackBerry, and Sierra Wireless.

Wi-LAN says Apple and other companies are infringing on its CDMA and HSPA patents, as well as patents it owns covering aspects of Wi-Fi and LTE technology.

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Yesterday, Wi-LAN announced it had settled outstanding patent claims and entered into license arrangements with HP and Novatel. The settled litigations were in relation to the Wi-Fi, CDMA case filed on September 1, 2011.

Wi-LAN’s case against Apple is the short term catalyst that could send its shares soaring, but long term Garcea says the Ottawa-based patent player has a demonstrated ability to sign new partnerships with multinationals and acquire new patent portfolios.

Garcea says he expects at least one dividend increase from Wi-LAN before the end of this year.

At press time, shares of Wi-LAN on the TSX were down 1.4% to $4.19.

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