Banc of America Downgrades Chip Stocks Including Intel, AMD, Taking 'More Cautious Stance'
biz.yahoo.com
NEW YORK (AP) -- Taking a "more cautions stance" on the semiconductor industry for 2008, Banc of America Securities downgraded several chip stocks Wednesday, among them industry leader Intel Corp.
Slightly higher inventory levels, combined with the likelihood of weaker seasonality and a potential economic slowdown "renders the fundamental picture unfavorable for the group," wrote Sumit Dhanda in a note to investors.
The analyst downgraded eight chip stocks -- three of them to "Sell" -- but said his cautious stance on the sector "stops short of being outright underweight."
Dhanda cut his rating on Intel's shares to "Neutral" from "Buy."
"While Intel's competitive positioning has never looked better...it is unlikely to serve as a sufficient offset to weak seasonality in (the first half of the year)," the analyst wrote.
Predicting "more pain ahead," Dhanda downgraded Intel's smaller rival Advanced Micro Devices Inc. to "Sell" from "Neutral." Despite the steep decline in AMD's shares in 2007 -- 67 percent -- "we believe it is still premature to bottom-fish the stock, as we believe that the company will face even more challenging times in '08," he wrote.
Companies such as Atheros Communications Inc., Broadcom Corp. and Intersil Corp. are poised to weather a weaker first half of 2008 due to strong product cycles, margin expansion or, in the case of Linear Technology Corp., a limited downside from current levels.
Here are the eight downgrades from Banc of America:
AMD, to "Sell" from "Neutral," target price $5
LSI Corp., to "Sell" from "Neutral," target price $4
National Semiconductor Corp., to "Sell" from "Neutral," target price $19.50
Analog Devices Inc., to "Neutral" from "Buy," target price $34
Intel, to "Neutral" from "Buy," target price $26
Power Integrations Inc., to "Neutral" from "Buy," target price $33
Semtech Corp., to "Neutral" from "Buy," target price $17
Texas Instruments Inc., to "Neutral" from "Buy," target price $36 |
