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Piper Jaffray Reiterates an 'Overweight' on Veeco Instruments (VECO); Raises PT & Estimates

February 11, 2010 2:39 PM EST Send to a Friend
Get Alerts VECO Hot Sheet
Price: $35.77 +0.79%

Rating Summary:
    11 Buy, 15 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 21 | Down: 36 | New: 7
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Piper Jaffray reiterates an 'Overweight' rating on Veeco Instruments (Nasdaq: VECO), raises price target from $40 to $44.

Piper analyst says, "We raise our estimates on VECO given its strong 4Q09 results and upbeat 1Q10 guidance. Earlier this week, VECO reported substantial upside to revenue, gross margin, and EPS and provided 1Q10 guidance above Street consensus. VECO said it plans to triple its capacity to 120 MOCVD tools per quarter on anticipation of strong order growth. We believe the concerns on flat LED bookings and slight GM q/q decline are unwarranted. We disagree with this bearish view given the following: 1) VECO LED tool orders (excluding MBE and solar) grew sequentially to ~$165M from ~$155M in Q3 and bookings are expected to remain strong, and 2) The company is incurring higher manufacturing expense in Q1 on increasing production capacity. Despite the higher capacity its EBITDA margin guidance increased to 18%-20% for Q1 from 17% in Q4...Significantly higher capacity a bullish indicator...We believe the lighting opportunity is underway, and not a longer term event, given Philips Lighting is now 10% LEDs. We believe the lighting opportunity is many times greater than the unfolding TV and Computing LED opportunity."

To see all the upgrades/downgrades on shares of VECO, visit our Analyst Ratings page.

Veeco Instruments Inc. and its subsidiaries design and manufacture solutions for customers in the high brightness light emitting diode (HB-LED), solar, data storage, semiconductor, scientific research, and industrial markets worldwide.



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