DA Davidson Downgrades Novellus (NVLS) to Neutral; Merger Cross Currents Offset Growing Business Strength
NVLS Hot Sheet
Rating Summary:2 Buy, 7 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
DA Davidson downgraded Novellus (NASDAQ: NVLS) from Buy to Neutral, price target raised from $44 to $52.
DA analyst said, "Due to a combination of the recent rally in the shares of NVLS (+80% over the past four months) and a stock price increasingly pegged to the performance of Lam (Nasdaq: LRCX), we believe shares of NVLS are fairly valued at this time. Thus, while we are raising our price target to $52 (based on 12x 2013 EPS plus $10 net cash per share), the limited upside potential compels us to downgrade our rating."
"...we are raising our 1Q estimates to sales of $320 million and pro-forma EPS of $0.65. Our 2012 revenue estimate increases to $1,365 million (from $1,350 million) and our EPS estimate of $3.25 remains unchanged. Our new 2013 estimates are for $1,440 million and $3.50."
"Based on our current view, we would recommend investors looking for exposure to the improving fundamentals in the semicap space focus on Applied Materials (Nasdaq: AMAT)(BUY), who should report strong results in two weeks, offers a dividend yielding ~2.5%, generates significant free cash flow and trades at an attractive valuation of only 11x CY’12 EPS and 6.5X CY’12 EV/EBITDA."
For an analyst ratings summary and ratings history on Novellus click here. For more ratings news on Novellus click here.
Shares of Novellus closed at $49.34 yesterday, with a 52 week range of $25.95-$49.50.
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DA analyst said, "Due to a combination of the recent rally in the shares of NVLS (+80% over the past four months) and a stock price increasingly pegged to the performance of Lam (Nasdaq: LRCX), we believe shares of NVLS are fairly valued at this time. Thus, while we are raising our price target to $52 (based on 12x 2013 EPS plus $10 net cash per share), the limited upside potential compels us to downgrade our rating."
"...we are raising our 1Q estimates to sales of $320 million and pro-forma EPS of $0.65. Our 2012 revenue estimate increases to $1,365 million (from $1,350 million) and our EPS estimate of $3.25 remains unchanged. Our new 2013 estimates are for $1,440 million and $3.50."
"Based on our current view, we would recommend investors looking for exposure to the improving fundamentals in the semicap space focus on Applied Materials (Nasdaq: AMAT)(BUY), who should report strong results in two weeks, offers a dividend yielding ~2.5%, generates significant free cash flow and trades at an attractive valuation of only 11x CY’12 EPS and 6.5X CY’12 EV/EBITDA."
For an analyst ratings summary and ratings history on Novellus click here. For more ratings news on Novellus click here.
Shares of Novellus closed at $49.34 yesterday, with a 52 week range of $25.95-$49.50.
Discover Wall Street's best ratings calls with the pros - Upgrade to Ratings Insider Elite. Free Trial!
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