Jan 10, 2011
11:45 AM INTC, BRCM Top Picks As Morgan Stanley Upgrades Chips
Posted by Tiernan Ray
Morgan Stanley chip analyst Mark Lipacis this morning raised his rating on the semiconductor industry to “in line” on the expectation that chips will benefit from low valuation multiples on the stocks and improving demand, factors he sees offsetting high earnings expectations and inventory buildup.
Lipacis thinks the industry could see a repeat of bounce-backs that happened in 2004 and 2006, as stocks rose 25% to 30% following estimate cuts as inventories corrected. The Philadelphia Semiconductor Index is already up 36% since estimates were cut in August and December, he notes.
Lipacis also changed some individual ratings: he lifted Microchip Technology (MCHP) and ON Semiconductor (ONNN) to Overweight from Equal Weight; lifted Advanced Micro Devices (AMD); lowered PMC-Sierra (PMCS), Skyworks Solutions (SWKS), and Maxim Integrated Products (MXIM) from Overweight to Equal Weight; and lowered Analog Devices (ADI) and Linear Technology (LLTC) to from Overweight to Underweight.
However, Lipacis’s top picks are Intel (INTC), Broadcom (BRCM), NXP Semiconductor (NXPI), Marvell Technology Group (MRVL), ON, Microchip, Micron Technology (MU), ARM Holdings (ARMH), Infineon Technologies AG (IFNNY), and ST Microelectronics (STM). Lipacis also likes the shares of Taiwan-traded Richtek Technology, which trades in the pink sheets here under “RHTKF,” and Ralink Technology. |
