Barclays Maintains an 'Overweight' on Applied Materials (AMAT); We View October Q as Marking a Trough

Barclays maintains an 'Overweight' on Applied Materials (NASDAQ: AMAT) price target lowered $1 to $15.

Barclays analyst says, "We Expect Shares to Be Range-Bound with Focus on Timing of Order Recovery: While consensus estimates should come down, we believe this was largely expected coming into the call. This said, AMAT offered little hope for a recovery in 2011 (guided orders down Q/Q in October). Layer in headwind across EES/ Display and uncertainty from VSEA impact to model, and we understand why investors will find this print rather unexciting. This said, we do expect AMAT to generate $1+ in earnings in CY11/12 meaning shares in after-market at ~$10.90 already reflect a lot of bad news. We see shares range-bound near term until we gain clarity on timing of recovery."

"We now model CY11 $9.9B/$1.11 (old $10.2B/$1.25, consensus $10.8B/$1.38) and CY12 $9.4B/$1.15 (old $9.4B/$1.20, consensus $10.5B/$1.30)."

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

Shares of Applied Materials closed at $11.36 yesterday.

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