Altera, XiLink: Jefferies Bearish on PLDs

Jefferies analyst John Lau this morning cut his ratings on both Xilinx (XLNX) and Altera (ALTR) to Underperform from Hold. Lau writes in a research note this morning that the programmable logic device sector has “consistently underperformed the overall semiconductor sector over the last 5 years.” His view is that PLDs have “morphed from growth to just cyclical stocks.”

Lau says the current business trends in PLDs “remain difficult, with promises of higher PLD adoption still not occurring.” Lay notes that on a compounded basis, PLD revenue growth has lagged behind the broader semiconductor industry, while the stocks over the last five years have been basically flat. He says a recent run-up in shares in the sector “is an aberration,” and that the stocks are likely to under perform the overall semiconductor sector from here.

Lau cut his price target on Altera to $17 from $19; his target on Xilinx drops to $21, from $23.

Comments

[paul]

Would be nice if they would spell Xilinx correctly.