AMD: When Analyst Calls Are Night & Day (AMD, INTC)

Advanced Micro Devices Inc. (NYSE: AMD) is taking a breather this morning after last night’s earnings.  At 9:26 AM EST we had shares trading down 5.9% at $8.46 on about 915,000 shares; right after the open at 9:43 AM EST down 7.8% at $8.29 on 8.5 million shares.  Here is the news on the earnings if you want to review that, but you have to love when analysts make night and day calls.  We are seeing that this morning… one “Strong Buy” and one “Sell” rating…. nice.  Even Jim Cramer piped in on this last night.

Broadpoint AmTech has the STRONG BUY saying it has leverage in the second half and the product company is under estimated.  AMD: A Strong Buy Now for Leverage in 2H10: Product Company Underestimated… The firm reiterated its BUY rating, but says STRONG BUY in the morning email, and the firm raised the price target to $14.00 from $12.00.  Revenue growth was driven by notebook units, server units, and GPUs.  AMD talked about flat or growing average sales prices, and the lack of transparency of a product company model will give investors a chance to accumulate shares.

Then there is a SELL rating in a downgrade from “Hold” at Auriga after a 69% move since the Intel Corp. (NASDAQ: INTC) settlement…. its target is $6.00.   It also represents a P/E multiple of 26-times based on Auriga’s FY10 pro-forma (excluding AMD’s share of GF’s losses) EPS estimate of $0.23, while Auriga has an estimated 12-times FY10 consensus $1.80 EPS.  Auriga noted, “Bulls may harp on the supposed value-creation of the event, but we believe that investors are likely to re-focus on fundamentals. Our work suggests that AMD has a relatively weak product cycle in CPU and is unlikely to regain lost market share near term…”

Hell, even Jim Cramer last night told a caller, “Sell AMD now and take your profits and roll them into Intel!”….

It is very frequent that investors and analysts will look at the same data and have a different interpretation.  During the great bull run-up we saw from March to December in 2009, it was frequent that you could just tally up the news in an all negative manner  and still just expect to see the words at the end, “Therefore you should buy the stock…”.  The chip and processor war continues.  Stay tuned.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C.OGG
JANUARY 22, 2010