DA Davidson Downgrades Cabot Microelectronics (CCMP) to Neutral; Adjusting Estimates on Updated Wafer Starts Expectations

DA Davidson downgraded Cabot Microelectronics (NASDAQ: CCMP) from Buy to Neutral, price target lowered from $45 to $42.

DA analyst says, "Monthly revenues reported by the top two Taiwanese foundries late last week indicated that the September quarter finished mildly better than very weak earlier expectations. On its Q2 conference call, the largest Taiwanese foundry TSMC (TSM -$11.99) (~20% revenue driver for CCMP) had guided for Q3 revenues to be down 6%-8% sequentially but the company reported a close to 4% revenue decline in Q3. Similarly, the second largest Taiwanese foundry UMC (UMC - $2.05) (~10% revenue driver for CCMP) had guided for Q3 revenues to be down in the low teens (in percentage terms) but the company reported a close to 10% decline in September. Given CCMP’s high exposure to leading foundries, we do expect the company to report a slightly better quarter (versus our previous expectations) but our EPS estimates are still $0.04 below consensus estimates."

"As a result of weaker wafer starts expectations, our CY11 and CY12 estimates of $2.12 on $434.5 million and $2.52 on $464 million get revised to $2.12 on $432.5 million and $2.45 on $454 million, respectively."

For more ratings news on Cabot Microelectronics click here and for the rating history of Cabot Microelectronics click here.

Shares of Cabot Microelectronics closed at $36.54 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Citi Upgrades Sirius XM Radio (SIRI) to Neutral, 'risk-reward is balanced at prevailing levels'
• Berenberg Downgrades Learning Technologies Group (LTG:LN) (LTTHF) to Hold
• Morgan Stanley Downgrades Innolux Corp. (3481:TT) to Equalweight