JMP Downgrades Advanced Micro Devices to 'Outperform'

Analyst Krishna Shankar cites the chipmaker's stock-price appreciation, following a strong fourth-quarter report

JMP Securities downgraded Advanced Micro Devices (AMD ) to outperform.

Analyst Krishna Shankar says he downgraded the chipmaker to outperform, from strong buy, based on strong stock-price appreciation. He says the 12 cents fourth-quarter earnings per share (including a 3 cents one-time gain) beat his 6 cents estimate, driven by significant strength in flash memory chips.

Although, like others, AMD anticipates some slowdown in the first quarter due to seasonality, he believes AMD is well-positioned to participate in a consumer and PC upcycle. Due to solid results, he raised the 40 cents 2004 earnings per share estimate to 45 cents. Shankar initiated a $1.00 2005 earnings per share estimate as the company gains momentum in businesses. He has a $20 target.

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