J.P. Morgan Cautious On Advanced Micro Devices (AMD)

J.P. Morgan analysts Christopher Danely and Venk Nathamuni maintained their Neutral rating for shares of Advanced Micro Devices, Inc. (NYSE: AMD) and introduced a price target of $7.

Danely and Nathamuni said that the corporate PC upgrade cycle does not seem to be benefiting Advanced Micro Devices because less than 20% of the chipmaker's sales come from the corporate market.

The analysts also said that they believed that Intel Corporation (NASDAQ: INTC) gained about 150 basis points of market share versus Advanced Micro Devices.

The J.P. Morgan analysts wrote that they were "introducing $7.00 price target. We are introducing a December 2010 price target of $7.00, or roughly 0.8X our C10 sales estimate. AMD is trading at 1.1X C10 sales, the lower end of its historic range of 0.2-4.0X trailing twelve months sales. We believe AMD is fairly valued at a 0.8X multiple, a discount to its peers such as NVDA and MU due to its lack of profitability and high debt. As a result, we remain Neutral on AMD."