Morgan Stanley analysts Joseph Moore and Craig Hettenbach upgraded their sector view on Semiconductors to In-Line from Cautious, stating that even though "nearly every company" in the group revised numbers down "basically every quarter," their negative call for semis in 2019 was "clearly wrong given stock price performance." Though they still have some caution about 2020 given the disruptive influence of trade tensions, their estimates are much closer to consensus now than they were six months ago, leading to the change in rating. The analysts said they are not moving to an Attractive industry view since they would push back on the secular view that semi demand will be better in the next five years than it was in the last five. Their Overweight rated stocks in the group include Xilinx (XLNX), Nvidia (NVDA), Ambarella (AMBA), Amphenol (APH), NXP Semiconductors (NXPI), Broadcom (AVGO) and Intel (INTC) while their Underweights are Sensata (ST) and ON Semiconductor (ON).

Exane BNP Paribas analyst David O'Connor downgraded On Semiconductor to Underperform from Neutral with a price target of $55, down from $74. The analyst has "grown more cautious" about end demand for silicon carbide, especially among U.S. suppliers. News of a potential cancellation of a low-end Tesla (TSLA) electric vehicle may make On's silicon carbide forecasts "more difficult to reach," the analyst tells investors in a research note. -

Exane BNP Paribas analyst David O'Connor downgraded ON Semiconductor to Underperform from Neutral with a $55 price target.

Barclays analyst Tom O'Malley raised the firm's price target on Broadcom (AVGO) to $1,500 from $1,405 and keeps an Overweight rating on the shares after hosting management for meetings. Broadcom is one of the unique companies that has a comprehensive view of the semis industry while also capable of providing an "intimate look" at the artificial intelligence market via custom silicon, the analyst tells investors in a research note. The firm says management highlighted the company's inroads with the consumer-facing AI world, providing a differing viewpoint versus Nvidia's (NVDA) vision of the world - pointing to a two-part market of consumer and enterprise that could grow to a 50/50 split over time. Barclays came away from the meetings "with a valuable second opinion on the future of AI and a greater appreciation for the company's many ways to win."

Barclays analyst Tom O'Malley raised the firm's price target on Broadcom to $1,500 from $1,405 and keeps an Overweight rating on the shares. The analyst increased the price after hosting management for meetings.