Intersil Shares Tumble After 'Sell' Rating

NEW YORK (AP) — Shares of chip maker Intersil Corp. took a hit Wednesday after a Citi Investment Research analyst initiated coverage of the stock with a "Sell" rating.

The analyst, Terence Whalen, set an $11 price target for shares. He told clients in a note Tuesday that Intersil is overly exposed to the market for computer power management chips, an area he says has seen intensifying competition.

Whalen projected a 37 percent drop in revenue for 2009 year-over-year. Longer term, he projected revenue growth of 8 percent between 2009 and 2014, down from 9 percent growth between 2003 and 2008.

Intersil's relatively limited exposure to the market for industrial customers illustrates the company's slow progress in tapping other revenue sources, Whalen said.

"Industrial has been a key focus market for Intersil, yet gains in this area have proven elusive, with industrial declining as a portion of sales," he said.

Intersil, based in Milpitas, Calif., saw shares drop 65 cents, or 4.9 percent, to $12.63 in afternoon trading.