DA Davidson Starts Novellus (NVLS) at Buy; Semi-Cycle, Model Leverage and New Markets All Driving Strong Growth

DA Davidson initiates coverage on Novellus (NASDAQ: NVLS) with a Buy. PT $57. (5 Yr/Long-Term PT $75)

DA analyst says, "We estimate that Novellus will post 20% revenue growth in 2011 (to $1.625 billion) followed by modest growth in 2012. This should drive earnings to $4.05 and $4.25 over the next two years, respectively, yet the stock is only trading at 8.7x our out-year estimate versus previous cycles when the stock averaged more than 20x forward earnings...Industry momentum expected to continue through 2012...Rock solid balance sheet and cash flow...Technology and customer trends favor Novellus."

For more ratings news on Novellus click here and for the rating history of Novellus click here.

Shares of Novellus closed at $37.13 yesterday.

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