Barclays on Semiconductors And Equipment: Like MU Near-Term; Updating SPE 2011/2012 Outlook
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Today's Overall Ratings:
Up: 19 | Down: 21 | New: 29
Rating Summary:
52 Buy, 12 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 21 | New: 29
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Barclays on Semiconductors And Equipment: Weekly Muse-ings: We Like MU Near-term and Updating Our SPE 2011/2012 Outlook
Analyst, C.J. Muse, said, "Stabilization Trade to Continue, But We Focus on Growth Names into Earnings: With the SOX nicely outperforming the S&P over the last month (+9% vs. +1%), we think earnings guide comes more into focus. While overall, we do expect the stabilization trade for semis to continue through year-end, we do see those that can offer up q/q guide for 4Q will be relative outperformers - here we point to leverage to Apple (Nasdaq: AAPL)/EMG handsets (Qualcomm (Nasdaq: QCOM), Broadcom (Nasdaq: BRCM)), stabilized PCs/continued server cycle (Intel (Nasdaq: INTC)), and China infrastructure/40nm share gains (Alterra (Nasdaq: ALTR)) as relative outperformers into earnings."
"Officially Updating SPE Estimates (including changes to EPS estimates and Price Targets) to Reflect WFE Outlook for $29B/$26-29B in 2011/12: We update our SPE estimates to reflect more muted growth expectations for 2012. The clear takeaway is this is largely discounted into shares (shares trading on average ~1.5x book vs. prior trough P/B average multiple of ~1.6x excluding the 2008 financial crisis) with focus now on timing of order inflection. Our work suggests continued strength in NAND coupled with upside surprise from foundries will drive an order uptick sometime between November-February, meaning the inflection is just around the corner. With shares trading at historical trough levels and expectations of a recovery offset partially by reset expected this earnings cycle (our revised CY12 EPS estimates are on average 10% below consensus) we think the time to buy SPE is sometime over the next 1-3 months. Our top picks in SPE are Lam Research (Nasdaq: LRCX) and ASML (Nasdaq: ASML)."
Barclays lower maintains an EW rating on Advanced Energy (Nasdaq: AEIS), but lowered PT from $14 to $10. Also cuts FY11 EPS estimate from $1.25 to $1.22 and FY12 from $1.30 to $1.05.
Maintains an OW rating on Applied Materials (Nasdaq: AMAT), but lowers PT from $15 to $13 and cut FY12 EPS estimate from $1.03 to $0.87.
Maintains an EW on Brooks Automation (Nasdaq: BRKS), lowers PT from $12 to $10 and FY12 EPS estimate from $1.13 to $0.93.
Maintains an EW on Cymer, Inc. (Nasdaq: CYMI), lowers PT from $42 to $37 and FY12 EPS estimate from $2.50 to $2.15.
Maintains an EW on FormFactor (Nasdaq: FORM), lowers PT from $10 to $8.
Maintains an EW rating on KLA-Tencor (Nasdaq: KLAC), lowers PT from $53 to $44 and FY11 EPS estimate from $3.76 to $3.61.
Maintains an OW rating on Lam Research (Nasdaq: LRCX), lowers PT from $55 to $46 and FY11 EPS estimate from $3.21 to $2.86.
Maintains an EW rating on LTX-Credence Corp. (Nasddaq: LTXC), lowers PT from $9 to $8 and FY11 EPS estimate from $0.40 to $0.16.
Maintains an OW rating on MKS Instruments (Nasdaq: MKSI), lowers PT from $32 to $26 and FY11 EPS estimate from $2.43 to $2.39 and FY12 from $2.30 to $2.05.
Maintains an OW rating on Teradyne Inc. (NYSE: TER), lowers PT from $18 to $17 and FY12 from $1.80 to $1.50.
Maintains an EW on Micron Technology (NYSE: MU), lowers FY11 EPS estimate from $0.14 to $0.08 and FY12 from $0.28 to $0.19. Maintains $8 PT.
Maintains an EW on Triquint Semiconductor (Nasdaq: TQNT), lowers FY11 EPS estimate from $0.68 to $0.55 and FY12 from $0.55 to $0.50.
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Analyst, C.J. Muse, said, "Stabilization Trade to Continue, But We Focus on Growth Names into Earnings: With the SOX nicely outperforming the S&P over the last month (+9% vs. +1%), we think earnings guide comes more into focus. While overall, we do expect the stabilization trade for semis to continue through year-end, we do see those that can offer up q/q guide for 4Q will be relative outperformers - here we point to leverage to Apple (Nasdaq: AAPL)/EMG handsets (Qualcomm (Nasdaq: QCOM), Broadcom (Nasdaq: BRCM)), stabilized PCs/continued server cycle (Intel (Nasdaq: INTC)), and China infrastructure/40nm share gains (Alterra (Nasdaq: ALTR)) as relative outperformers into earnings."
"Officially Updating SPE Estimates (including changes to EPS estimates and Price Targets) to Reflect WFE Outlook for $29B/$26-29B in 2011/12: We update our SPE estimates to reflect more muted growth expectations for 2012. The clear takeaway is this is largely discounted into shares (shares trading on average ~1.5x book vs. prior trough P/B average multiple of ~1.6x excluding the 2008 financial crisis) with focus now on timing of order inflection. Our work suggests continued strength in NAND coupled with upside surprise from foundries will drive an order uptick sometime between November-February, meaning the inflection is just around the corner. With shares trading at historical trough levels and expectations of a recovery offset partially by reset expected this earnings cycle (our revised CY12 EPS estimates are on average 10% below consensus) we think the time to buy SPE is sometime over the next 1-3 months. Our top picks in SPE are Lam Research (Nasdaq: LRCX) and ASML (Nasdaq: ASML)."
Barclays lower maintains an EW rating on Advanced Energy (Nasdaq: AEIS), but lowered PT from $14 to $10. Also cuts FY11 EPS estimate from $1.25 to $1.22 and FY12 from $1.30 to $1.05.
Maintains an OW rating on Applied Materials (Nasdaq: AMAT), but lowers PT from $15 to $13 and cut FY12 EPS estimate from $1.03 to $0.87.
Maintains an EW on Brooks Automation (Nasdaq: BRKS), lowers PT from $12 to $10 and FY12 EPS estimate from $1.13 to $0.93.
Maintains an EW on Cymer, Inc. (Nasdaq: CYMI), lowers PT from $42 to $37 and FY12 EPS estimate from $2.50 to $2.15.
Maintains an EW on FormFactor (Nasdaq: FORM), lowers PT from $10 to $8.
Maintains an EW rating on KLA-Tencor (Nasdaq: KLAC), lowers PT from $53 to $44 and FY11 EPS estimate from $3.76 to $3.61.
Maintains an OW rating on Lam Research (Nasdaq: LRCX), lowers PT from $55 to $46 and FY11 EPS estimate from $3.21 to $2.86.
Maintains an EW rating on LTX-Credence Corp. (Nasddaq: LTXC), lowers PT from $9 to $8 and FY11 EPS estimate from $0.40 to $0.16.
Maintains an OW rating on MKS Instruments (Nasdaq: MKSI), lowers PT from $32 to $26 and FY11 EPS estimate from $2.43 to $2.39 and FY12 from $2.30 to $2.05.
Maintains an OW rating on Teradyne Inc. (NYSE: TER), lowers PT from $18 to $17 and FY12 from $1.80 to $1.50.
Maintains an EW on Micron Technology (NYSE: MU), lowers FY11 EPS estimate from $0.14 to $0.08 and FY12 from $0.28 to $0.19. Maintains $8 PT.
Maintains an EW on Triquint Semiconductor (Nasdaq: TQNT), lowers FY11 EPS estimate from $0.68 to $0.55 and FY12 from $0.55 to $0.50.
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