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Barclays Today Downgrades Four Chip Stocks


© Stocksak. Barclays Today Downgrades 4 Stocks of Chip Stocks

By Senad Karaahmetovic

Barclays analysts downgraded four semiconductor stock today because they see material cuts in earnings in the Handset, Memory, and PC parts of the sector.

The analysts downgraded Analog Devices (NASDAQ:), NXP Semiconductors (NASDAQ:), Qorvo (NASDAQ 🙂 to Equal Weight From Overweight The analysts also reduced Silicon Laboratories’ (NASDAQ:), to Equal Weight from Underweight.

“We expect material cuts through earnings in RF/Memory/PC and would look for these cuts to get more positive. Analog on the other hand, has not even begun the process and this is why we are stepping away now in favor of better names off the bottom,” the analysts said in a client note.

The analysts add that they made rating changes as “we would rather be early than late with this rotation.”

“We do feel the PC market is finally near the bottom, but want to see more from the DC side, particularly AMD where we are still well below the street. Given the rally after LRCX earnings, Semi Cap still requires more de-risking. We see WFE at or below $69B in 2023 but more importantly, see 2024 down further, leaving really no reason to own these names here,” they added.

Texas Instruments (NASDAQ 🙂 is lowered to Equal Weight from Belowweight because they believe that the company will be the primary beneficiary of Chips Act. Moreover, TXN should experience “a more muted 2022” as supply constraints will translate into a smaller EPS correction.

“Valuation also looks better relative to the rest of the analog names,” the analysts concluded.

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