Financial analysts at Sterne Agee have downgraded AMD to a neutral rating with an $8.50 price target as the PC market slows.
”While we have been positive on AMD for a long time, and AMD is executing well, and taking desktop-graphics market share with its Trinity and Radeon 7970 platforms, we believe the slowing PC market limits upside,” Sterne Agee analyst Vijay Rakesh explained in an industry note obtained by TG Daily.
“While AMD continues to execute, material upside to consensus might be limited given PC transition and competitive headwinds; we are downgrading to Neutral with an $8.50 PT. [Although] AMD has outperformed the SOX in 1H12, it is down significantly from its YTD peak.”
According to Rakesh, the PC market is slowing in 2H12 ahead of Windows 8 and ultrabook-tablet ramps.
However, says the analyst, builds should pick up in late September for Windows 8 – even if ODM-OEM expectations of actual Win8 sellthrough are somewhat muted.
Rakesh also confirmed Sterne Agee projected AMD’s Trinity APU ramping well into SepQ, which will likely help the company “see some tailwinds” with new 17W Trinity integrated in sleekbooks-ultrathins.
“[In general], OEMs/ODMs are struggling to find product balance between UltrabooksWin8 and x86-ARM tablets into 2H12. [Nevertheless], Radeon 7970 GHz has been showing better graphics performance than its peers – with 28nm GPUs ramping well, without capacity constraints,” Rakesh added.
