DA Davidson Downgrades Cabot Microelectronics (CCMP) to Neutral; Recent Data Points Limit Upside Surprise

DA Davidson downgraded Cabot Microelectronics (NASDAQ: CCMP) from Buy to Neutral. PT lowered from $57 to $53.

DA analyst says, "The recent release of monthly revenue numbers at key Taiwanese foundries TSMC (NYSE: TSM) and UMC (NYSE: UMC) indicates that March quarter revenues were down 4% and 10%, respectively, on a sequential basis. TSMC and UMC were responsible for 18% and 11% of revenues at CCMP in FY10, respectively. Revenues at CCMP have been highly correlated with TSMC’s revenues given the high exposure to this company. While our current revenue expectations for CCMP of down 4.6% sequentially in March are in line with TSMC’s numbers, we believe any meaningful upside to CCMP’s March quarter revenues is limited."

"Based on slightly lower wafer start projections and ongoing concerns from the Japan crisis, we are revising our FY11 and FY12 estimates from $2.83 on $470 million and $3.13 on $506 million to $2.80 on $467 million and $3.10 on $502 million, respectively."

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

Shares of Cabot Microelectronics closed at $49.02 yesterday.

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