Dougherty Downgrades Atmel (ATML) to Neutral as Results Disappoint

Dougherty & Co downgraded Atmel (NASDAQ: ATML) from Buy to Neutral and removed its price target (prior $8.50). The change follows disappointing Q2 results.

Analyst Charles Anderson said, "The main culprit this time is Mobility (touchscreen, sensor hub, Mobile TV) -- which we estimate will be cut nearly in half from levels seen in late 2014. Additionally, Atmel is seeing an inventory correction from a major crypto memory customer and slow-moving 8-bit MCU inventories at distributors. While Atmel is widely seen both in the investment community and the industry as a takeout candidate (for the MCU business), these continual misses are eating into the valuation case. At 2.5x-3.5x EV/S our new FY16 revenue estimate, Atmel would fetch $8-$11 per share."

"The stock will probably trade near the bottom end of that range until resolution on the issue. So we'd probably rather hold the shares than add to positions given the uncertainties. Hence, we are downgrading to Neutral. We intend to re-evaluate depending on what the company does or doesn't do with the new CEO appointment," added the analyst.

For an analyst ratings summary and ratings history on Atmel click here. For more ratings news on Atmel click here.

Shares of Atmel closed at $8.55 yesterday.

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