SSB raised EPS and price target on NVLS
Salomon Smith Barney
Monday, December 20, 1999
--SUMMARY:--Novellus Systems--Semiconductor Equipment
Superior 4Q99 expected due to stronger than anticipated bookings trends (up 45-50% seq. vs. our prev. est. of 10-15%). Visibility is good for 1H00.
We estimate bookings of around $280-290 million for 4Q99, with record bookings in all product lines (HDP-CVD and Speed bookings are expected around $100 million). This is a significant increase of 45-50% from an estimated $195 in 3Q99, and well above previous expectations for a sequential increase on the order of 10-15%. Copper is beginning to accelerate and we look for the ramp in 2H00 but stress that the current strength is driven by increased capacity buys. All regions are strong, with Japan expected to achieve record bookings. Backlog is expected to end at over $300 million during the end of 4Q99, which gives us increased visibility for the first half of 2000.
Given the favorable bookings trends, we are raising our 4Q99 est. to $0.79 from $0.65 (consensus), 2000 to $4.56 from $3.09, and 2001 to
$5.25 from $3.69. We reiterate our 2H (Outperform, High Risk) rating and are raising our price target to $126, or 24x our 2001 est. of $5.25, from $92. |
