FYI-08:06 JMP initiates the Semiconductor sector with an Underperform
JMP initiates the Semiconductor sector with a Market Underperform and a 180 target on the SOX. The firm says recent appreciation in semiconductor equities appears to be discounting a recovery that they believe is both premature to dial into forecasts and likely to ultimately disappoint when it arrives. In addition to macroeconomic adversity, the firm says the industry is also lacking in meaningful product cycle catalysts to absorb excess inventories and manufacturing capacity likely to persist well into the second half of 2009. The firm says despite their cautious outlook, they rate NVIDIA (NVDA) Outperform owing to differentiated technology positioning, distracted competitors, and new product initiatives such as Tesla and Tegra. They also rate NetLogic (NETL) and QUALCOMM (QCOM) Market Perform owing to sound and relatively uncontested 2010 prospects, but that must be weighed against considerable near-term uncertainty. The firm also initiates Advanced Micro Devices (AMD) tgt $1.85, Broadcom (BRCM) tgt $13, Cavium Networks (CAVM) tgt $8.50, Intel (INTC) tgt $11, Marvell Technology Group (MRVL) tgt $6.50, Texas Instruments (TXN) tgt $13.50, Volterra Semiconductor (VLTR) tgt $6, with Underperforms
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