Bank of America Merill Lynch analyst Vivek Arya released a note downgrading Xilinx (NASDAQ: XLNX) from buy to neutral and lowered the price target to $48 from $55.
Xilinx reported second quarter sales of $613 million which was below the $630 million estimate. This is in response to an excess shipment of 28nm component, which is speculated to result in at least a one quarter correction. Arya notes that the company is handling the costs and positive trends could resume later in the year.
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Xilinx is the leader in programmable chips and could benefit from future growth in wireless and wired networking in several different markets. However, Arya does note that Xilinx has missed sales estimates for two consecutive quarters and “has guided toward near term muted revenue growth”.
Xilinx opened on Wednesday, July 23 down around 15 percent at $40.84 after a previous close of $48.15.