NEW YORK (TheStreet) -- Morgan Stanley downgraded Altera (ALTR) - Get Report to "equal-weight" from "overweight" on Monday.

Shares of Altera were falling 1.5% to $43.74 in early trading Monday morning.

The analyst firm said the downgrade is due to the appreciation of the programmable chips maker's stock on Friday following reports that it may be acquired by Intel (INTC) - Get Report. "Altera traded to $44.39; this is over 20% above our previous price target, and reflects a value of 26.5X 2015e EPS and 23.3X 2016e," Morgan Stanley analysts wrote. "Net of cash, the multiples are 20.6X 2015e and 18.1X 2016e."

Despite the downgrade Morgan Stanley raised its price target for the company to $44 from $46 following the report of the possible acquisition. The higher price target represents a 29% premium over the value of Altera's stock before news of the possible acquisition broke, and is a similar premium to those seen in other recent semiconductor acquisitions.

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Separately, TheStreet Ratings team rates ALTERA CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALTERA CORP (ALTR) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• ALTERA CORP has improved earnings per share by 16.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ALTERA CORP increased its bottom line by earning $1.52 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $1.52).
• Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 5.14, which clearly demonstrates the ability to cover short-term cash needs.
• Net operating cash flow has increased to $150.78 million or 15.30% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.21%.
• The gross profit margin for ALTERA CORP is rather high; currently it is at 67.48%. Regardless of ALTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 23.15% trails the industry average.
• You can view the full analysis from the report here: ALTR Ratings Report