Bernstein Upgrades ARM Holdings (ARMH) to Market Perform

Bernstein upgraded ARM Holdings (NASDAQ: ARMH) from Underperform to Market Perform saying while still expensive, the consensus is down 10% and catalysts are past.

"ARM has underperformed the FTSE250 indices by 12pts since 1Q13. Misses in royalty revenues and a subsequent 10% downward revision in earnings explains the performance but a material de-rating did not happen," analyst Pierre Ferragu comments. "On the back of earnings revision and our forecast update, we are in line with consensus for 2014 and 2015, and see a rather positive newsflow coming our way. We increase our target to 750p mostly reflecting the appreciation of European Equities."

He added, "We continue to believe ARM is overvalued, but by a reduced margin; and the lack of catalyst makes maintaining a short position unwise. We upgrade the stock to Market-Perform and wait for a better entry point to play the name."

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

Shares of ARM Holdings closed at $48.30 yesterday.

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