Photronics (PLAB) PT Trimmed to $13 at UBS

UBS analyst Stephen Chin trimmed his price target on Photronics (NASDAQ: PLAB) to $13.00 (from $14.00) following after the company provided preliminary Q1 results. The firm maintained a Buy rating.

Chin commented, "We maintain a Buy rating on PLAB despite weak near-term demand trends in logic IC, as we believe it is poised to benefit from increasing OLED investment, and its strong cash balance and stable cash generation could provide valuation support in a potentially weak macro environment. PLAB updated its Jan-16 sales / EPS guidance to $129m / $0.16 (ex-special items) from $138m / $0.19 previously, as demand softened in the high-end logic business in Asia and mainstream IC suffered a greater slowdown than typical seasonality. We attribute the softer demand to macro weakness rather than any market share losses, as some foundry customers may be exhibiting caution given potentially decelerating IC unit growth, particularly in the smartphone space. We note that the high-end FPD and memory businesses remained strong in the Jan-16 quarter, which we view positively as we continue to believe one of the key areas of upside for PLAB in the long-term will be in high-end FPD as OLED penetration increases in smartphones and other applications. We look for more color on the drivers of the weakness and demand trends heading into the Apr-16 quarter on its earnings call on Feb 24th."

For an analyst ratings summary and ratings history on Photronics click here. For more ratings news on Photronics click here.

Shares of Photronics closed at $9.87 yesterday.

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