Novellus Message Board - Msg: 17790055

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Technology Stocks : Novellus

NVLS 2.400

+2.1%

Jul 24 5:00 PM EST

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To: Proud_Infidel who wrote (3345)	7/24/2002 7:28:32 PM
From: Gottfried	Read Replies (2) of 3813

From Barron's today... Novellus Novellus Inc. (NVLS-Nasdaq) By Bear Stearns (29.55, July 23, 2002) We are downgrading shares of Novellus to Attractive from Buy. On Monday, Novellus reported second quarter results. The key takeaway from the earnings report was a renewed sense of caution from the company. Revenue was $222.2 million, below our estimate of $220.6 million but earnings per share (EPS) matched our $0.08 estimate. Novellus' guidance for orders in the current quarter was $250 million, down about 10% from the $276 million it reported in the June quarter. Though it appears to us that Novellus is being conservative, and that a more realistic outcome is for flat orders, we feel the reduced outlook will cause substantial ongoing pressure on the stock (and potentially other stocks in the group). Novellus also reported pushed out orders from two customers over the last two weeks. Though the orders were for older aluminum-based technology, it nonetheless is a sign of reduced momentum. Citing liquidity concerns at their customers (who purchase semiconductor equipment) brought on by decreased access to capital and slowing spending in light of an uncertain outlook, management was forthright about their concerns saying they felt there was a long way to go before they would classify this as a recovery. Management reiterated that copper continues to be invested in and will lead the way out of the downturn. We lowered our price target from $75 to $45 based on a price-to-earnings multiple of approx. 38x our new 2003 EPS estimate of $1.18. -- Robert Maire online.wsj.com

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