Linear Technology: S&P Intraday Laggard

NEW YORK ( TheStreet) -- Linear Technology ( LLTC) was the worst performer in the S&P 500 Monday morning.

The S&P 500 was gaining 4.18 points, or 0.3%, to 1,412.65.

Shares of Linear Technology fell 2.58% to $32.83. The stock was downgraded Sunday by UBS analysts to neutral from buy.

"While our sector view remains positive, we note that the pace of recovery in industrial markets, especially China, is not fast enough to justify the valuation at 17x P/E; furthermore at 75% gross margin we see limited margin leverage in LLTC (unlikeADI)," UBS analysts wrote in the report Sunday. "We downgrade to Neutral & within the analog sector we prefer ADI on margin leverage & Maxim on smartphone leverage."

Linear Technology has an estimated price-to-earnings ratio for next year of 14.76 times; the average for semiconductor companies is 15.53.. For comparison, Analog Devices ( ADI) has a lower forward P/E of 14.67; Altera's ( ALTR) forward P/E is 17.7.

Twelve of the 24 analysts who cover Linear Technology rated it hold. Nine analysts rated the stock buy and three gave the stock a sell rating.

TheStreet Ratings gives Linear Technology an A- grade with a buy rating and a $38.46 price target. The stock has risen 9.31% year to date.

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-- Written by Alexandra Zendrian

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