5 Chip Stocks J.P. Morgan Likes
Despite Intel's exceptional performance potential and short-term upside, J.P. Morgan downgraded the name in January, on worries about peaking gross margins and estimates. Since the downgrade on January 17, shares have gained 10.54%, compared to a 13.5% gain in the Nasdaq. Danely rates Intel shares "neutral" with a $25 price target.
Texas Instruments makes chips for a wide array of electronic devices, including the iPhone, iPad and other mobile electronics. Shares have gained 14.68% year-to-date.
J.P. Morgan believes the chipmaker offers more upside than Intel or even Advanced Micro Devices(AMD) , as it has more leverage, which could lead to upside from the consensus estimates. J.P. Morgan rates Texas Instruments shares "overweight" with a $39 price target.
Analysts polled by Thomson Reuters expect Texas Instruments to report $3.06 billion in revenue and 29 cents per share for the first-quarter. The company, however, recently cut first-quarter guidance, saying it still sees a reduction in demand for its wireless products. Texas Instruments' first-quarter outlook is now 15 cents to 19 cents per share on a revenue range of $2.99 billion to $3.11 billion. The Dallas-based firm had previously projected earnings of 16 cents to 24 cents per share on a revenue range of $3.02 billion to $3.28 billion.
TheStreet Ratings rates Texas Instruments "buy" with a B+ grade and a price target of $38.61.
Analog Devices makes digital signal processing integrated circuits (ICs) used in a wide array of commercial applications. Shares have gained 12.21% year-to-date.
Like Texas Instruments, J.P. Morgan believes Analog Devices allows for more earnings upside due to higher leverage and higher exposure to a turnaround in the semiconductor story. J.P. Morgan rates Analog Devices shares "overweight" with a $42 price target.