Analyst Upgrades Intersil To Outperform

SAN FRANCISCO (AP) — A Wedbush Morgan Securities analyst upgraded shares of Intersil Corp. to "Outperform" on Tuesday and added it to his "Best Ideas" list, saying he expects the chip maker's stock will climb faster as its steady gross margin improvements gain more attention.

In a note to clients, analyst Patrick Wang upgraded the stock from "Neutral" and raised his price target by $5 to $19. Wang said that while he previously stayed on the sidelines due to concerns about margin pressure and climbing expenses, he now thinks Intersil has overcome these issues and expects gross margin expansion in upcoming quarters.

The company's "most important lever" for this expansion will be an improved product mix in the second half of 2009 and in 2010, he said.

"We expect a more favorable product mix to boost blended margins given our belief that industrial and communications are inflecting along with expectations for 3Q growth of about 10 percent and 4 percent, respectively," he said.

Intersil shares rose 22 cents to finish trading at $15.98.