Shares in ARM Holdings (LSE: ARM.L - news) fall 3.2 percent, top fallers on a slightly weaker FTSE 100 (FTSE: ^FTSE - news) index, with traders citing an analyst day on Tuesday as a reason to lock in profits on the stock after a strong run.
Although analysts noted that ARM's management on Tuesday struck a confident note on the growth potential of the company, they reckoned the good news was already priced into the stock which has more than doubled since a trough in July 2012.
ARM trades on a 12-month forward price/earnings ratio of 47.5 times, well above its 10-year average of 30.1 times, according to Thomson Reuters DataStream.
"We had the ARM investor day yesterday which is probably the (most) material driver of the stock price," Nick James, an analyst at Numis Securities, says.
"There wasn't anything especially negative about it... (but)when you've got a stock that's had a lot of momentum and lots of upgrades recently, to sustain that momentum, you need more of the same in terms of upgrades and maybe you'd come away from the day yesterday thinking well probably we've actually baked in everything for the time being."
Morgan Stanley (Xetra: 885836 - news) published a "tactical idea" research note on Tuesday saying it reckoned ARM's share price would fall in absolute terms over the next 60 days following the recent gains.
Traders also cited a string of announcements from Intel , Sony (Xetra: 853687 - news) and Samsung, which could weigh on ARM's outlook, dampening sentiment towards the shares.
Reuters messaging rm://tricia.wright1.thomsonreuters.com@reuters.net
