Thomas Weisel downgrades Intel
Sept 18 (Reuters) - Thomas Weisel Partners on Monday lowered its rating on chip maker Intel Corp. (INTC.O: Quote, Profile, Research) to "peer perform" from "outperform," citing market share shifts due to less than optimal product mix from the company in the coming quarters.
The brokerage said despite the technical superiority of Intel's Core micro-architecture, these products will represent less than 25 percent of shipments exiting 2006.
This will leave the majority of the market addressable by rival Advanced Micro Devices Inc.'s (AMD.N: Quote, Profile, Research) products, which offer a solid price/performance proposition, it added.
The brokerage said it believes investors may re-rate Intel's valuation lower as the company potentially struggles to grow revenue over the next 18 months.
In early trade, Intel shares rose 0.51 percent to $19.61 on the Nasdaq, while AMD shares rose almost 2 percent to $27.00 on the New York Stock Exchange. (Reporting by Neha Singh, Anant Vijay Kala in Bangalore)
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Intel downgraded by Thomas Weisel
By Tomi Kilgore
Last Update: 10:31 AM ET Sep 18, 2006
NEW YORK (MarketWatch) -- Intel (INTC) was downgraded to peer perform from outperform at Thomas Weisel Partners, citing concerns over the negative impact of market share shifts. Analyst Eric Gomberg said he sees "less than optimal" product mix from Intel in the coming quarters. "Despite trading below the historical [valuation] average...we believe investors will not continue to reward the shares of Intel with historical valuations as steady-state market share goes from previous 80/20 to an estimated 70/30," Gomberg said. The semiconductor giant's stock, a component of the Dow industrials, was last up 9 cents at $19.58.
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