Piper Jaffray Cuts Price Target on KLA-Tencor (KLAC) to $63 Following EPS Beat

Piper Jaffray maintained an Overweight rating on KLA-Tencor (NASDAQ: KLAC), and cut the price target to $63.00 (from $74.00), following earnings report. KLAC reported revenues and non-GAAP EPS of $756M and $0.99, ahead of consensus of $752M and $0.91. KLAC guided Sept. 2015 revenue and non-GAAP EPS at $595-$655M and $0.46-$0.66, below consensus of $733M and $0.88.

Analyst Ruben Roy commented, "We reiterate our OW rating following soft Sept. quarter guidance that likely represents a temporary trough ahead of meaningful catalysts for CY16. KLAC guided new orders in Sept. at $450-$650M (-18% q/q at the midpoint). However, C2H15 orders are guided flat to C1H15, implying Dec. qtr. orders of $814M. KLAC has experienced weaker than expected demand from foundry as process control equipment is being re-used from 20nm to 16/14nm. However, 10nm likely represents a new order cycle beginning in C1H16 and KLAC’s new Gen 5 optical tool will also be shipping in 2016 providing an additional catalyst to growth. Growth likely returns in the Dec. 2015 quarter, with revenue picking up steam in C2H16 on 10nm and Gen 5 tool shipments. We debut CY16 estimates and lower our PT to $63 ($74 previously) following a reset in expectations for the business."

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 $52.06 yesterday.

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