Nomura Securities Global Semi Monitor: Analog Semis Can’t Escape Slowing GDP - Q4 Bookings Remain Subdued

Nomura Securities Global Semi Monitor: Analog Semis Can’t Escape Slowing GDP - Q4 Bookings Remain Subdued by Romit Shah

Shah said, "We believe investors will have an opportunity to buy semiconductor stocks at more attractive prices in the first half of 2012 as negative revisions moderate and comparables become more favorable. Most Preferred: Broadcom (Nasdaq: BRCM) and Maxim (Nasdaq: MXIM); Least Preferred: Intel (Nasdaq: INTC) and TI (NYSE: TXN)."

"Monitor Focus: Analog Semis Can’t Escape Slowing GDP: If velocity into the downturn drives velocity out, then the analog names should see a positive turn first. Earnings revisions for this group are down 30-35% from the peak. In contrast, our broader coverage is down 20-25% and the S&P 500 is down roughly 5%...However, recent price action is not encouraging. Analog Devices (NYSE: ADI) (Neutral), which echoed the same message that boosted stocks in October, is down 6% since reporting last week...More importantly, our research indicates that bookings remain subdued at a couple large analog companies. This was not the case in 2009 and 2010 as distribution prepared for a seasonally strong first half. This year, there is an expectation for bookings to weaken in December due to factory shutdowns...Thus, investors should be bracing for another round of estimate revisions in January. This does not seem priced into names such as Linear (Nasdaq: LLTC) and TI, which trade around 18x, excluding net cash...As such, we think investors will have an opportunity to buy analog names at more attractive prices in the first half of 2012."

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• First Cash Financial (FCFS) PT Lowered to $140 at TD Cowen
• First BanCorp (FBP) PT Raised to $21 at Keefe, Bruyette & Woods
• Airbus revenue rises, delivers 142 commercial aircraft in Q1