Zacks Investment Research downgraded shares of Atmel Corporation (ATML) from OUTPERFORM to NEUTRAL on February 22, 2013, with a target price of $7.00.
Atmel reported modest fourth quarter 2012 results with adjusted earnings exceeding the Zacks Consensus Estimate by $0.04. The company is investing more in its core microcontroller business to augment its margins and overall growth going forward. Fast-growing touch-sensing technology is one of the major growth drivers for Atmel's microcontroller business. The company's strong relationships with Nokia, Motorola, HTC and Samsung are also expected to bolster its business in future. However, the company's high inventory level along with foreign exchange rate risk may negatively affect its financial results in coming quarters. We are changing our long-term recommendation on the stock from Outperform to Neutral based on its lackluster results.
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