FBR Capital Markets Downgrades Atmel Corporation to Market Perform (ATML)

FBR Capital Markets is out with a research report this morning, where it Downgrades Atmel Corporation to Market Perform ATML; it has a price target of $6.75, down from $7.25. The FBR analysts downgraded the stock, more or less, on valuation; they cited three key points: 1. Growing ship-ahead risks for Atmel's MCU business as the industrial and automotive sectors continue to replenish inventories 2. MaXTouch, while a meaningful opportunity, could be somewhat inflating expectations 3. Downside financial sensitivities drive a high 16.5x P/E (2011) versus the sector at 12x. As for valuation, the FBR analysts remarked, “Our $6.75 price target is based on a 14x P/E target multiple (1H11 including stock compensation), down slightly from a 15x multiple previously given growing ship-ahead risks, seemingly appropriate given Atmel's margin and growth profile.”