Ultra Clean (UCTT) PT Lowered to $40 at Needham

Needham analyst N. Quinn Bolton lowered the price target on Ultra Clean (NASDAQ: UCTT) to $40.00 (from $44.00) while maintaining a Buy rating.

The analyst commented: "Ultra Clean reported a surprise miss-and-cut quarter, due to a large step down of the direct China business into 1Q25 despite that ex-China business remains stable. Management cited the product qualification delays of a top Chinese semicap customer and the sudden weakening of Chinese semicap demand as reasons for the pronounced China weakness. For the full year, management sees 5% WFE growth and still expects outperforming WFE, although the degree of outperformance may narrow due to its China weakness (we estimate a 70% decline YoY). As UCTT has been trading at a meaningful discount to its direct peer largely due to its direct China business (~10% of total revenue), we believe a sharp decline of its China revenue is a clearing event for the stock. Our estimates are reduced and PT is trimmed to $40. Maintain Buy."

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