Amkor gains after analyst upgrades stock to 'Buy'

Amkor Technology Inc. shares jumped Monday after an American Technology Research analyst upgraded the stock to "Buy," saying checks indicate demand for high-end handsets could help demand grow in the second half of the year.

Shares of the microchip assembly and test company rose $1.05, or 9.9 percent, to $11.69. In the past year, the stock has traded between $6.14 and $16.29.

American Technology analyst Bill Ong raised the stock from "Neutral" with a $14 price target in a client note. The analyst said checks indicate demand for high-end handsets and mobile devices, which would call for increased stacked die assembly and packaging and should help the company's product demand.

"Amkor has strong customer exposure in the communications segment from most of the major handset and communications related chip customers," he said.

And though demand seems weak for low-end handsets, Ong thinks demand for high-end handsets is offsetting this softness.

The analyst also believes that the enterprise resource planning, or ERP, system disruption Amkor encountered at its Philippines facility in May has been mostly contained and is understood by investors.

"Overall, we believe the June quarter setback is a well-understood, one-time event and that investors will begin focusing on improving business strength in both 3Q and 4Q led by high-end handset unit growth and seasonal demand pick-up," he said.

Ong raised his 2008 earnings-per-share estimate for Amkor to $1.20 from $1.38 and also raised his 2009 estimate.