Previewing the third-quarter results of semiconductor companies, Jefferies said it favors Advanced Micro Devices, Inc. (NASDAQ: AMD). Additionally, the firm said it considers Analog Devices, Inc. (NASDAQ: ADI), Texas Instruments Incorporated (NASDAQ: TXN) and Microchip Technology Inc. (NASDAQ: MCHP) as " analog renaissance" plays.
Analyst Mark Lipacis said, although consumption of semiconductors is increasing, the PHLX Semiconductor Index has outperformed the S&P 500 Index by 700 basis points since Jefferies' annual Semis + HW conference on Aug.30.
Therefore, the analyst said it makes sense to be selective heading into the third-quarter reporting season. The analyst said semiconductor stocks still trade at a slight discount to the S&P 500 Index.
Over the past four quarters, Jefferies said semiconductors have shipped at a faster rate than their OEM customers. That said, the firm expects semiconductors to ship at the same rate as their OEM customers, starting in the third quarter of 2017 for the next four quarters.
Citing its sample of OEMs, the firm said semiconductor consumption appears to be accelerating, which it feels is consistent with the view of Jefferies' Global Equity Strategist that there is a budding U.S. capex cycle.
- AMD: Buy/$19.
- Intel: Underperform/$30.
- Nvidia: Buy/$230.
- Analog Devices: Buy/$105.
- Microchip: Buy/$106.
- Maxim Integrated: Buy/$58.
- Texas Instruments: Buy/$110.
At Time Of Publication
- AMD shares were up 2.14 percent at $14.10.
- Intel was adding 1.04 percent to $40.85.
- Texas Instruments was advancing 0.83 percent at $95.97.
- Analog Devices shares were ever so slightly falling, down 0.13 percent, at $88.81.
- Microchip Technology was down 0.09 percent at $92.65.
- Maxim Integrated was advancing 0.10 percent to $52.14.
Related Link: Intel And AMD: Are Q3 Expectations Realistic?
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|Jul 2017||Baird||Initiates Coverage On||Outperform|
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