Citi Downgrades Nova Measuring Instruments (NVMI) to Neutral

Citi analyst Atif Malik downgraded Nova Measuring Instruments (NASDAQ: NVMI) from Buy to Neutral with a price target of $224.00 (from $273.00).

The analyst comments: "We downgrade NVMI to Neutral from Buy to align with our Phase 3 sector stock-picking framework where we prefer consumables or wafer starts stocks over OEM and components markers. We continue to view Nova as a key beneficiary of rising 3D devices with 30% incremental metrology capital intensity in GAA and expect top-line growth to outperform process control with the ramping technology inflection. Nova is also well-positioned to benefit from the increasing adoption of front-end tools being used at the back-end processes including advanced packaging. That said, we are concerned about the sustainability of the outperformance on muted WFE spend in 2025 and thus the higher multiple that NVMI has been traded at compared with its SMID semi cap peers. We cut TP to $224 from $273 using 31x P/E, which is above the 3-year average P/E of 24x to reflect outsized optical metrology sales growth and rising PDC capital intensity, but below the 38x P/E prior to due to market multiple compression."

For an analyst ratings summary and ratings history on Nova Measuring Instruments click here. For more ratings news on Nova Measuring Instruments click here.

Shares of Nova Measuring Instruments closed at $206.71 yesterday.

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