Shares of Lattice Semiconductor Corp. (Nasdaq: LSCC) moved up 2 1/4 to close at 61 1/4 after Lehman Brothers analyst James Barlage raised it from an "outperform" recommendation to a "buy."
Back in April, Lattice shelled out $500 million for Advanced Micro Devices Inc.'s (NYSE: AMD) programmable logic unit, Vantis.
Industry analysts are convinced telecommunications, networking and automotive companies will turn more and more to companies such as Altera Corp. (Nasdaq: ALTR) and Lattice for these components.
"The acquisition of Vantis could provide significant sales an earnings synergy to Lattice in the programmable logic market, one of the semiconductor industry more attractive niches," Barlage said in a research report.
He also set a new 12-month price target of $85 a share.
Altera rallied up 2 11/16, or 7 percent, to 38 9/16 while Actel Corp. (Nasdaq: ACTL) and Xilinx Inc. (Nasdaq: XLNX) lost 13/16 and 3/8 a share, respectively.
Analysts have suggested that demand is far ahead of supply for these devices and that trend should continue at least for the next two or three quarters.
First Call consensus expects Lattice to earn 37 cents a share in its second quarter and $2.13 a share in the fiscal year.
Its shares moved up to a 52-week high of 64 1/2 last month after falling to a low of 18 7/8 in October.
Eleven of the 20 analysts covering Lattice rate the stock either a "buy" or "strong buy."