UBS Raises price Target on Veeco Instruments (VECO) to $24.50; Reiterates Buy
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UBS reiterated a Buy rating on Veeco Instruments (NASDAQ: VECO), and raised the price target to $24.50 (from $21.50), following the company's MOCVD sales preannouncement. Veeco also announced it will make an additional $10M in annualized cost reductions just in its ALD business.
Analyst Stephen Chin commented, "We keep a Buy rating as its positive sales pre-announcement gives us more confidence the MOCVD industry cycle is continuing to improve after 2 years of being in a downturn. Veeco had previously reported in August that it was starting to see higher MOCVD orders, and that its orders in the month of July alone exceeded 2Q16 MOCVD orders. MOCVD order have historically been the metric that moves the stock, and we believe that stronger orders are sustainable if activity continues to be from multiple customers/geographies (not just China) and that Veeco's customers are upgrading older generation MOCVD tools to newer EPIK products. We believe that MOCVD orders to China may have also bottomed and look for more signs that that the tier-1 LED chip makers in China continue to have factory utilization rates above the 80% range."
Shares of Veeco Instruments Inc. closed at $20.92 yesterday.
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