Altera (NASDAQ:ALTR) Will Grow Market Share, but Margins Under Pressure

Altera (NASDAQ:ALTR) will gain market share, according to Jefferies (NYSE:JEF), but added that R&D investment will put pressure on margins at this time.

Jefferies said, "we believe Altera is well positioned to gain additional share near-term driven by 60nm and 40/45nm ramps in new customer products but expect the higher R&D investment for 28nm to slow earnings growth."

They dropped their full year 2011 EPS estimate on Altera from $2.82 to $2.63, adding revenues will probably fall short of prior estimates.

Jefferies reiterates a "Hold" rating on Altera, which was trading at $36.50, down $1.41, or 3.72 percent, as of 2:14 PM EST. Jefferies raised their price target on Altera from $35 to $40.