Citigroup recently released a report updating their view on semiconductor stocks now that most of the names in the space have announced Q4 earnings. Citigroup ranked 10 names in the space from most- to least-preferred stocks.
Top Names
Microchip Technology Inc. MCHP 1.83%
Microchip Technology remained Citigroup’s top semiconductor pick. Analysts like the strong growth that has resulted from increasing market share, high margins, stellar cash management and strategic acquisition history. Citigroup rates Microchip stock at Buy.
Texas Instruments Incorporated TXN 1.78%
The only other Buy-rated stock on Citigroup’s list is the No. 2-ranked Texas Instruments. Citigroup expects Texas Instruments to produce the highest earnings growth of all the 10 names, and analysts praise the company’s cash management and operational execution.
Bottom Names
Linear Technology Corporation LLTC 2.48% and Advanced Micro Devices, Inc. AMD 3.37%
Linear Technology and Advanced Micro maintained the nine and 10 spots, respectively. These two names are the only two Sell-rated names on the list. Citigroup analysts mention secularly-declining margins for Linear Technology and “questionable” resource management for Advanced Micro as reasons for the low rankings.
Movers
Analog Devices, Inc. ADI 3.2% and Maxim Integrated Products Inc. MXIM 2.69%
Both jumped up a spot on Citigroup’s list since the last ranking.
The moves by these two names came at the expense of Intel Corporation INTC 0.15%, which Citigroup dropped in the rankings from the three spot down to five after the company’s Q4 numbers included the first negative data points on PCs in about a year.
The Full Rankings
1. Microchip Technology: Buy
2. Texas Instruments: Buy
3. Analog Devices: Neutral
4. Maxim Integrated Products: Neutral
5. Intel: Neutral
6. Xilinx, Inc. XLNX 1.22%: Neutral
7. Altera Corporation ALTR 1.79%: Neutral
8. ON Semiconductor Corp ONNN 3.12%: Neutral
9. Linear Technology: Sell
10. Advanced Micro Devices: Sell
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