Stock Upgrades and Downgrades to Consider (AMD, FCX, IBM, MSFT, TI, TRLG)

Here's the new list of analyst upgrades and downgrades to consider.

Advanced Micro Devices "overweight," target price reduced

Analyst Mark Lipacis of Prudential Financial maintains his "overweight" rating on Advanced Micro Devices (AMD), while reducing his estimates for the company. The target price has been reduced from $45 to $40.

In a research note published on July 7, the analyst mentions that the company expects its June quarter revenues to decline by 9% q/q, which is worse than what was earlier anticipated. A sustained price war and PC market issues are likely to exert pressure on Advanced Micro Devices’ share price in the near term, the analyst says. The scope for Dell to be a big customer for the company and share gains are likely to boost Advanced Micro Devices’ share price in the longer term. The EPS estimates for 2006 and 2007 have been reduced from $1.73 to $1.36 and from $2.24 to $1.73, respectively.

AMD 1-yr chart:

Freeport McMoRan Copper and Gold upgraded to "buy"

Analyst Gary Lampard of Canaccord Adams upgrades Freeport McMoRan Copper and Gold (FCX) from "hold" to "buy," while raising his estimates for the company. The target price has been raised from $65 to $77.

In a research note published this morning, the analyst mentions that the company has the potential to increase its dividend per share to above $5 per annum in the forthcoming years, while maintaining a robust cash balance. The diluted EPS estimates for 2006 and 2007 have been raised from $5.35 to $7.67 and from $3.34 to $6.12, respectively, to reflect revised currency and commodity price assumptions.

FCX 1-yr chart:

IBM "neutral," target price reduced

Analysts at UBS reiterate their "neutral" rating on International Business Machine (IBM), while reducing their estimates for the company. The target price has been reduced from $90 to $82.

In a research note published this morning, the analysts mention that recent channel checks indicate lower-than-expected bookings for 2Q06. IBM’s services and hardware revenues in the current year are likely to miss expectations, the analysts add. The EPS estimates for 2006 and 2007 have been reduced from $5.80 to $5.75 and from $6.25 to $6.20, respectively.

IBM 1-yr chart:

Microsoft "outperform"

Analyst Robert Breza of RBC Capital Markets maintains his "outperform" rating on Microsoft Corporation (MSFT). The target price is set to $32.

In a research note published July 7, the analyst mentions that the company is expected to post its 4Q EPS and revenues, scheduled to be reported on July 20, roughly in-line with the consensus. The revenue contributions from Microsoft's Server & Tools division and emerging divisions are expected to have been 17% and 40% y/y, respectively, the analyst adds. The upcoming product cycle in the next fiscal year is expected to provide the company with long-term growth opportunities, according to RBC Capital Markets.

MSFT 1-yr chart:

Telecom Italia "buy"

Analysts at Dresdner Kleinwort reiterate their "buy" rating on Telecom Italia (TI). The target price is set to €2.80.

In a research note published this morning, the analysts mention that the company’s Brazilian asset is exhibiting fast-paced growth and is likely to deliver significant value upside going forward. Telecom Italia’s M&A risk is quite low, except for the potential acquisitions of the internal assets of AOL in Germany and France, the analysts say. The current valuation of the company’s stock is attractive, given weak foreign exchange effects and the market’s current fluctuations, Dresdner Kleinwort adds.

TI 1-yr chart:

True Religion Apparel "outperform"

Analyst Brad A Stephens of Morgan Keegan maintains his "outperform" rating on True Religion Apparel Inc (TRLG).

In a research note published on July 7, the analyst mentions that the company is expected to post its revenues and EPS for 2Q06 ahead of the recently raised estimates. True Religion Apparel’s revenues in Japan are expected to have declined by 47% during the quarter, the analyst says. True Religion Apparel's share price is likely to either appreciate after the 2Q06 results or be range-bound, reflecting investor concerns surrounding the company's performance in Japan, Morgan Keegan adds.

TRLG 1-yr chart: