From Credit Suisse--
Applied Materials (AMAT, $40.44, BUY)
Target (12 Months): $65
John W. Pitzer 1 415 836 6376 john.pitzer@csfb.com
Lowering F01 Estimates To Reflect A Difficult 1HC01 For The Industry.
We are lowering our F01 revenue and EPS estimates on AMAT to $9,760 million and $2.05 from $11,260
million and $2.85. Street consensus for F01 is $3.13. We are not adjusting 1Q01(Jan) estimates at this time.
Macro issues, not company specific issues. We are lowering estimates on AMAT, KLAC ($27.50, BUY),
LRCX ($15.00, BUY), and NVLS ($25.94, BUY) to reflect what we believe will be a difficult 1HC01, in which
we believe fundamentals will bottom in the Jun/Jul timeframe. We have reduced our revenue and bookings
outlook for AMAT in 1HC01 to $4.7 billion and $4.3 billion from $5.4 billion and $5.2 billion to reflect our views
on 1HC01 semiconductor capital plans. (See our industry note 12/01/00 titled “Lowering Estimates to Reflect
1H01 Difficulties. Triggers to Buy Not Apparent.”)
Trading at 19X our new CY01 EPS estimate of $2.06 and 3.5X 2001 revenues, we anticipate AMAT to trade in
a range with downside bias until the macro issues play out. Late 1Q / early 2Q could provide the best buying
opportunity for strong 2H01 appreciation. We maintain our Buy rating.
fred |
