Intel Corporation (NASDAQ: INTC) shares responded positively to the company’s announcement regarding the appointment of VMware, Inc. (NYSE: VMW), the top buyer Pat Gelsinger as CEO.
In a sympathy move, shares of rival chipmaker Advanced Micro Devices, Inc. (NASDAQ: AMD) withdrew because investors viewed Intel’s move as negative for the company.
The AMD Analyst: Ambrish Srivastava, analyst at BMO Capital Markets, downgraded AMD from Market Perform to underperformance and lowered the price target from $ 80 to $ 75.
The AMD thesis: AMD has done a “tremendous” job under CEO Lisa Su, Srivastava said in the downward note.
The valuation of AMD shares reflects the virtually flawless performance under Su, the analyst said.
Intel’s erroneous mistakes have opened up a “blue sky” scenario for AMD, helping it gain market share at the expense of Intel, making its valuation even higher, he said.
Related Link: AMD Analyst Projects Strong Start Up to 2021 for Chipmaker
AMD’s share increase in servers is likely to decline in 2020, and consensus estimates will be optimistic, Srivastava said.
BMO said its price target assumes that AMD will trade at a rich valuation, although it is lower than where it is currently trading.
The price target assumes that AMD shares will trade at a PE multiple of 35 times the calendar year 2022 EPS estimate of $ 2.15.
AMD price action: AMD shares lost 1.08% on Thursday, closing at $ 90.79 after a fall of 3.8% on Wednesday.
Related Link: Option Trading Games $ 2 Million on Advanced Micro Devices Following CES Presentation
Photo: VMWare.
Latest ratings for AMD
| Date | Company | Action | Of | On |
|---|---|---|---|---|
| Jan 2021 | Cowen & Co. | Maintain | Perform better | |
| Jan 2021 | BMO Capital | Downgrades | Market performance | Underperforming |
| Nov 2020 | Wells Fargo | Upgrades | Equal weight | Overweight |
Check out more analysis ratings for AMD
Check out the latest analytics ratings
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.