J.P. Morgan Downgrading PMC-Sierra

J.P. Morgan Chase & Co. is out with a research report on PMC-Sierra

and is downgrading shares to Neutral from Overweight, and is lowering its price target to $7.50 from $9. In a note to clients, J.P. Morgan Chase & Co. writes, "We are downgrading PMCS to Neutral from OW. Although the team has done a solid job on new product development and sustaining a premium gross and operating margin profile, PMCS has not been able to extract meaningful growth from new products and market expansion opportunities and drive faster growth versus the average company in our universe. Over the past 18 months, the company's growth performance has underperformed our universe of companies. PMCS's est. 4Q11 sales will have DECLINED 5% from the time of our initiation (18 mos ago) vs. a 12% avg GROWTH for our group, and compared to a 1% decline in global semi revenues. Post disappointing 4Q guidance, our new PT of $7.50 assumes ~18% upside from current levels, which is comparable to the average upside for our universe of stocks." Shares of PMCS gained 52 cents yesterday to close at $6.83.