Advanced Micro Devices "neutral," target price reduced

05/14/04 - UBS

NEW YORK, May 14 (New Ratings) - Analysts at UBS maintain their "neutral" rating on Advanced Micro Devices (AMD), while reducing their estimates for the company. The target price has been reduced from $20 to $16.

In a research note published this morning, the analysts mention that Advanced Micro Devices is witnessing challenges in transforming Athlon XP to Athlon 64. Intel has a nine-to-twelve months lead over Advanced Micro Devices in transitioning to 90nm wafers, the analysts say. The company would have to boost its 90nm wafer production in the near-term to sustain its gross margins, UBS believes. The EPS estimates for 2004 and 2005 have been reduced from $0.55 to $0.53 and from $0.94 to $0.81, respectively.