Banc of America downgraded Advanced Micro Device (AMD ) to sell.
Analyst Sumit Dhanda says the downgrade is based on two primary beliefs: 1) the company's second quarter is tracking below expectations, 2) the company will continue to face an uphill fight in its battle to gain, or even maintain, market share against Intel. He says with this in mind, he believes there's substantial downside risk for shareholders, particularly at the current valuation (36 times the new 2004 earnings per share estimte.).
Dhanda widened the 89-cent 2003 loss estimate to a $1.00 loss, and cut the 35 cents 2004 earnings per share estimate to 20 cents. He also cut the $7 target to $5, which is 25 times the new 2004 earnings per share estimate.