Needham & Company Maintains a 'Buy' on Applied Materials (AMAT); Closure of the VSEA Acquisition and A Rebound of Silicon Orders to Drive Higher Guidance

Needham & Company maintains a 'Buy' on Applied Materials (NASDAQ: AMAT) price target raised $1 to $14.

Needham analyst says, "Closure of the VSEA (Hold) acquisition today removes one of the overhangs on AMAT shares, as we continue to believe in the multiple benefits of the deal despite the high price. While the Solar sector is facing significant headwinds and the display market is slowing, we believe a rebound of semi equipment orders, coupled with the addition of Varian, will enable AMAT to deliver higher revenues and earnings over the next few quarters."

"We expect F4Q11 results to fall short of consensus of $2.17B/$0.20 due to further deterioration of both the Silicon and Solar sectors. However, we expect stronger semi equipment orders to drive the rebound of Silicon and AGS revenues, especially since F1Q ends in Jan when new capex budgets are released. Coupled with the addition of Varian offsetting weakness in EES (Solar) and a slowdown in Display (after 2 strong Qs), we are modeling F1Q12 rev/Pro Forma EPS at $2.18B/$0.20 vs. Street’s $2.08B/$0.18."

For an analyst ratings summary and ratings history on Applied Materials click here. For more ratings news on Applied Materials click here.

Shares of Applied Materials closed at $12.14 yesterday.

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