UMC upgraded to Buy from Neutral at Goldman Sachs

Goldman Sachs upgraded UMC to Buy from Neutral with a price target of $9.70, up from $8.80. The firm is positive on the company’s “better structural profitability” after its higher than expected Q2 gross margins and higher than expected Q3 gross margin guidance, the analyst tells investors in a research note. Better than expected gross margins were a “surprise” as the firm was previously expecting UMC to face pressure given intensifying competition in the mature foundry industry, especially from mainland China, with pricing to further deteriorate due to oversupply, Goldman Sachs added.