Stock Buy Call: Chartered target price raises to 1.86 sgd by OCBC!

OCBC Investment Research said it has upgraded its call on Chartered Semiconductor to "buy" from "hold" and raised its fair value for the company to 1.86 sgd from 1.38 as it expects better earnings for the chipmaker over the next two years. It has raised its profit forecast for Chartered this year by 24 pct to 100.3 mln usd and by 40 pct to 126.2 mln usd for 2007 given the firm's positive outlook and expected improvement in margins. Chartered reported last week first-quarter net profit of 25.27 mln usd, ahead of its own estimate of 10-20 mln. OCBC analyst Derek Cher expects Chartered to get a boost from the deal signed with Microsoft Corp to manufacture CPU products for Microsoft's Xbox 360 game consoles with production expected to begin in the first quarter of 2007. Higher chip orders may also come from Advanced Micro Devices (AMD) as it has been gaining market share from rival Intel, Cher said. "We are not ruling out the possibility of AMD raising its chip orders to meet increasing demand over the next few quarters," he said. Chartered closed up 0.08 sgd at 1.66 last Friday.