Kulicke and Soffa Message Board

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Technology Stocks : Kulicke and Soffa

KLIC 35.64

-4.1%

3:59 PM EST

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To: klaus pluszynski who wrote (3567)	11/18/1999 11:15:00 AM
From: Darin	Read Replies (1) of 5482

Part 4 of 4 approximately $5000 per bonder - driving gross margins higher in FY00. Pricing continues to be favorable, ASPs remain steady around the $100k level for the 8028 wire bonder. Raising our FY00 and FY01 EPS estimates to reflect better demand environment and margin improvements. Due to better than expected demand, better visibility throughout FY00 and into the Company's ability to execute on its planned manufacturing transition to Singapore, we are raising our EPS estimates for FY00 to $2.00 from $1.95. For Calendar 2000, we are raising our estimates to $2.70 from $2.65. The following table shows changes to estimates. We believe that current street consensus estimates of $1.61 will move up to our estimate. Figure 6: Estimate Revisions (Dollars in millions, except per-share data) 2000E New 2000E Old 2001 New 2001 Old Revenue $701.0 $670.5 $801.8 $775.0 Gross Margin 33.0% 34.1% 35.6% 35.8% Op'g Margin 9.3% 9.9% 11.5% 11.7% Net Income $48.7 $47.6 $66.4 $65.1 EPS $2.00 $1.95 $2.70 $2.65 Source: Company reports and Prudential Securities estimates. CONCLUSION AND VALUATION: Raising price target, upside to EPS still exists in 2H00 and FY01. We are raising our 12-month price target on shares of KLIC from $45 to $55 and maintaining our Strong Buy rating. Our 12-month target price is based on a modest multiple of 24 times our CY00 estimate of $2.30. Our new target price represents approximately 35% appreciation from current levels on what we believe is both somewhat conservative estimates and multiple. We believe the current price levels and appreciation potential justify our price target increase. We look forward to a clearer view of 2001 as we proceed into 2000, where we will once again review our model for potential upsides.

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