NEW YORK (TheStreet) -- Shares of Intel Corp (INTC) were down 1.58% to $33.37 in early market trading Tuesday, after analysts at BMO Capital Markets downgraded the chipmaker to "market perform" from "outperform" this morning.
The firm also reduced its price target on shares of Intel to $33 from $40.
BMO analysts said they believe Altera is worth only $28 per share on a standalone basis and does not like the valuation Intel paid for the company.
The acquisition would help Intel defend a crucial semiconductor business, according to The Wall Street Journal.
Altera previously turned down Intel's $54 per share unsolicited offer in April, The Journal noted.
Santa Clara, Calif.-based Intel designs and manufactures integrated digital technology platforms, consisting of a microprocessor and chipset.
Insight from TheStreet's Research Team:
David Peltier commented on Intel in a recent post on RealMoney.com. Here is a snippet of what Peltier had to say about the stock:
Monday was a volatile session for U.S. stocks and the broader market averages closed 0.15% to 0.25% higher. Industrial names led the way higher, while telecom stocks lagged. Elsewhere, the yield on the benchmark 10-year U.S Treasury gained 5.8 basis points, to 2.179%.
Merger Monday was the theme of the day, highlighted by Intel's (INTC) agreement to purchase Altera (ALTR) for $16.7 billion in cash. While the move had been speculated about for some time, Altera moved nearly 6% higher on the session, while Intel moved fractionally lower. In addition, chemical producer OM Group (OMG) jumped 28% after receiving a $1 billion takeover bid from a private equity firm.