Deutsche Bank Downgrades KLA-Tencor (KLAC) to Sell, More Cautious

Deutsche Bank downgraded KLA-Tencor (NASDAQ: KLAC) from Hold to Sell with a price target of $44.00 (from $56.00).

The firm comments, "We expect improving 28nm yields to negatively impact demand for process control equipment in the foundry sector and see risk of a multi-quarter bookings slowdown in 2013. With shares trading near 52-week highs, at a premium valuation and considering high investor expectations, we recommend investors take profits as we see downside to ~$40-$45 levels."

"Demand for process control equipment has generally outperformed other equipment categories in this up cycle, particularly in the foundry sector. But we expect this trend to change, as KLAC's 2012 foundry orders imply the foundry segment is on pace to ~150k wspm incremental process control capacity, well above the 90-100k wspm capacity projections from semicap companies," the analyst also said.

For an analyst ratings summary and ratings history on KLA-Tencor click here. For more ratings news on KLA-Tencor click here.

Shares of KLA-Tencor closed at $52.98 yesterday.

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