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Technology Stocks : Silicon Valley Group

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To: Terry D who wrote (2775)	4/20/2000 12:58:00 PM
From: Terry D	Read Replies (2) of 2946

Silicon Valley Group (SVGI - $25 ó) Attractive Price Target: $40 Upgrade from Neutral to Attractive Market Cap: $859 Million Index: NASDAQ Composite, Russell 2000 Robert Maire ? Semiconductor Capital Equipment We upgrade SVGI to an Attractive from a Neutral rating and setting a one year price target of $40 per share based on about 30x our FY2001 earnings estimate of $1.39 per share. SVGI appears to be more firmly back on track for growth. However, investors should keep in mind that SVGI? s good revenues and earnings didn? t happen by chance but were helped quite a bit by the recovery of the industry as well as SVG's new products. Given the recent confirmation of the increase in spending by Intel, SVGI should stand to benefit given the fact that Intel is its largest customer. Intel noted that it was short on capacity and will clearly need to buy more steppers to ramp to meet demand and next generation technology Though the track and furnace business has been the weaker side of SVGI , there is room for improvement across the board and with the previously acquired APCVD division (formerly Watkins Johnson) SVGI? s valuation has trailed the industry and as such represents a comparatively good value even after taking into account some of the weaker points. SVGI is expected to release Q2 financial results on 4/20. We are expecting $0.20 per share vs. a loss of (0.55) in same year ago period. Our expectations are in-line with street consensus estimates. Bear Stearns: 9/2000E $0.85 to $0.94; Q2 $0.18 to $0.20 9/2001E $1.29 to $1.39 Consensus: 9/2000E $0.87; Q2 $0.20 9/2001E $1.40 Consensus Rating: 2.8 (last updated 4/19)

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