Merrill Lynch cut Intel (INTC ) to near term neutral from strong buy, and keeps long term buy.
Analyst Joseph Osha also cut his ratings on Maxim Integrated (MXIM ) to near term buy from strong buy; and cut Lattice Semiconductor (LLTC ), SemTech (SMTC ), Texas Instruments (TXN ) and Triquint Semiconductor (TQNT ) to near term neutral from buy.
Osha says it is apparent that the semiconductor business is benefiting from easy comparison sales and low inventory. He thinks an early cycle semiconductor upturn played itself out.
Osha says there's little doubt that a recovery should occur in the second half of 2002, assuming standard seasonality holds. Unfortunately, he thinks revenue and earnings per share estimates already reflect a reasonable recovery expectation.
He says his U.S. semiconductor universe shows aggregate revenue growth of 6% sequentially in the third quarter and 9% in the fourth quarter. Osha also says the likelihood of a stronger recovery is evaporating as the year progresses.