AMD: Bank of America Upgrades to Neutral

Bank of America’s Sumit Dhanda this morning upped his rating on Advanced Micro Devices (AMD) to Neutral from Sell, setting a price target of $6. “Having been consistently cautious on the stock since early 2006, we now believe that our thesis has largely played out–share losses to Intel (INTC), persistent pressure on cash flow/profitability, strain on the balance sheet–and that the stock has limited downside risk from current levels.”

He says longer-term headwinds remain, but that there are potential catalysts in the short-to-intermediate term, including improved free cash flow generation with the potential to reach break-even by Q4, reduced stress on the balance sheet as it finally shifts to an asset-lite strategy, and improved product uptake.

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