UPDATE: Goldman Sachs Downgrades Hittite Microwave to Sell on Margin Risk, Valuation

Goldman Sachs downgraded Hittite Microwave

from Neutral to Sell and announced a $54.00 price target. Goldman Sachs commented, "We are adding Hittite to the Americas Sell List. While we believe Hittite is a well-run company, we see 14% downside to our 12-month, $54 price target and prefer other stocks to capitalize on a broader semi recovery, as (1) we expect Hittite's gross margins to trend lower due to mix and increased competition, (2) we estimate that Hittite has about 35% of sales tied to defense, an area where we expect sales to lag the semi industry recovery due to government budget cuts, and (3) Hittite trades at a 55% premium to peers on normalized P/E and 25% on 2013 EBITDA." Hittite Microwave closed at $62.44 on Monday.