UPDATE 1-RESEARCH ALERT-Citigroup upgrades 3 chip cos
Nov 3 (Reuters) - Citigroup raised its rating on chip companies Integrated Device (IDTI.O: Cotización), NVIDIA (NVDA.O: Cotización) and STMicroelectronics (STM.N: Cotización) to "buy" from "hold," saying it expects semiconductor stocks to outperform the market in the next 12 months.
The brokerage said despite a woeful economic forecast, the forthcoming semiconductor downcycle will not be as severe as past cycles given today's well-controlled inventory environment.
Additionally, depreciation levels have fallen for chip companies due to controlled spending and a greater use of foundries, the brokerage said.
Citigroup noted that growth in semiconductor revenue has fallen from its peak in June 2008 to a September low and expects that a recovery in second-half of 2009 is likely given the dramatic declines expected in fourth quarter of 2008.
Following are the price target changes made by the brokerage: COMPANY New Old Integrated Device $9 $7 NVIDIA $13 $12 STMicroelectronics $12 $13 (Reporting by Purwa Naveen Raman in Bangalore; Editing by Amitha Rajan)
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