Intersil: Oppenheimer Upgrades, Lifts Estimates

Intersil (ISIL) shares are trading higher this morning after Oppenheimer analyst Rick Schafer upped his rating on the chip maker to Outperform from Perform, setting a $20 price target. The stock closed Monday at $14.79.

Schafer raised his 2009 EPS estimate to 63 cents from 57 cents; for 2010 he now sees $1.01, up from 71 cents.

“Our more positive stance is based on expected top-line performance as key verticals - smart phones, mobile PC and TV - enjoy a seasonal [second half] ramp,” he writes in a research note. He adds that gross margisn appears poised for a sustained (if modest) expansion as pricing, mix and utilization improve.

Schafer notes that the stock has lagged peers, up 48% from the March trough, versus 57% for the SOX. “With ISL high profile and still high quality, we view the prevailing negative sentiment on the name as an opportunity and expect incremental good news will quickly be reflected in the stock,” he writes. (Let me just say that I find it hard to think of a 48% rally as being consistent with “negative sentiment.” But maybe that’s just me.)

ISIL today is up 49 cents, or 3.3%, to $15.28.