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Needham & Company Upgrades Ultra Clean (UCTT) to Buy

February 4, 2013 7:43 AM EST Send to a Friend
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Price: $8.95 -0.67%

Rating Summary:
    6 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 25 | Down: 20 | New: 23
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Needham & Company upgraded Ultra Clean (NASDAQ: UCTT) from Hold to Buy with a price target of $7.50.

The firm comments, "We are upgrading UCTT to Buy from Hold based on an improved outlook of the semicap sector and our increased confidence in its revenue growth trajectory and profitability. Recent commentaries from large semicap customers and the large chipmakers suggest equipment orders have troughed and business will sequentially trend higher in the next few quarters. Coupled with several recent wins and the bottoming of its non-semi businesses, we believe UCTT's sales are poised to outperform peers as the industry recovers. Additionally, we believe mgmt has several levers to improve its profitability and coupled with better top-line growth, we see upside to Street’s estimates. We project UCTT can earn ~$0.81/sh on a mid-cycle revenue level and based on this earnings power, we believe the stock is undervalued at this time. We recommend small-cap investors looking to participate in the rebound of the semicap sector should Buy UCTT ahead of its 4Q12 report on February 19. We assign a PT of $7.50, which translates to a 2014E P/E of 17X or a mid-cycle P/E of 9X."

For an analyst ratings summary and ratings history on Ultra Clean click here. For more ratings news on Ultra Clean click here.

Shares of Ultra Clean closed at $5.89 yesterday.




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