Nov 3 (Reuters) - Citigroup raised its rating on chip companies Integrated Device (IDTI.O), NVIDIA (NVDA.O) and STMicroelectronics (STM.N) 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)