Analyst Picks & Pans November 19, 2009, 12:12PM EST

Stock Picks: Intel, Texas Instruments

Plus Wall Street analyst opinions on LSI, National Semiconductor, Marvell, NetApp, and Dick's Sporting Goods

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Intel (INTC)

Texas Instruments (TXN)

LSI Corp. (LSI)

Marvell Technology (MRVL)

Bank of America Merrill Lynch downgrades to neutral from buy

Microchip Technology (MCHP)

Maxim Integrated Products (MXIM)

National Semiconductor (NSM)

Power Integrations (POWI)

Bank of America Merrill Lynch downgrades to underperform from neutral

In downgrading eight chipmakers on Nov. 19, BofA Merrill analyst Sumit Dhanda said in a client note that his industry model suggests that following a period of rapid replenishment of inventory and normalization of semiconductor shipments to "true" consumption levels, inventories in the supply chain are approaching a level suggesting a modest overshoot vs. equilibrium levels.

While Dhanda sees limited risk to near-term earnings estimates for the chip stocks, he thinks the longer these conditions persist, the greater the risk of a correction in the supply chain.

NetApp Inc. (POWI)

Credit Suisse keeps neutral; raises estimates, price target

Credit Suisse analyst Bill Shope said on Nov. 19 that NetApp's $910 million in second-quarter revenue and non-GAAP earnings per share (EPS) of 37 cents beat his respective $878.2 million and 30 cents estimates. He said seasonal strength in the public sector, "surprising" strength in Europe, and a strong close in the commercial segment led to the upside for the provider of enterprise storage and data management software and hardware. Also, "sharp gross margin upside added a surprising leverage component" to NetApp's earnings upside.

For the third quarter, the analyst raised his revenue estimate to $948.7 from $920.2 million and his EPS forecast to 37 cents from 36 cents. For fiscal 2010, he hiked his revenue projection to $3.71 billion from $3.61 billion and his EPS view to $1.36 from $1.28.

Shope also raised his $25 price target on the stock to $27. He noted that NetApp expects gross margins to decline to more normal levels going forward.

Dick's Sporting Goods (DKS)

Needham & Co. keeps hold

Retailer Dicks's Sporting Goods reported sharply higher EPS on Nov. 19, but its fourth-quarter earnings view disappointed investors. Needham analyst Sean McGowen said on Nov. 19 that Dick's third-quarter sales and EPS topped both his estimates and Wall Street consensus forecasts, but the increase in the company's full-year guidance was modest. He noted that Dick's said third-quarter sales benefited from cold weather, which pulled sales from the fourth quarter forward; with this in mind, the company raised its full-year guidance by only 2 cents, to $1.04-$1.09.

The analyst noted that other challenges to the company's fourth-quarter growth include comparisons against strong sales of firearms and ammunition; and continued uncertain consumer sentiment. He also noted that his full-year EPS view was $1.10.