From Briefing.com Semiconductor related: 9:41AM SMTL upgraded to Strong Buy at Needham; target $25 13.33 +0.33: Needham upgrades Semitool to Strong Buy from Buy and raises their target to $25 from $20 after the co beat consensus yesterday; in addition to attractive valuation, firm also believes that the co could capture new major customers for both surface conditioning and electrodeposition applications, as the co has been shipping systems to multiple new customers for evaluation and they believe it is likely that some of these new customers will move on to large-sized production orders.
9:33AM MRVL: Pacific Growth recommends aggressive purchase on weakness 42.55 -2.02: Pacific Growth believes Seagate's earnings miss bears no negative implication for Marvell. Firm recommends aggressive purchase of the shares of Marvell on the potential weakness induced by the Seagate miss. To firm's knowledge, Marvell DOES NOT supply to Seagate for the desktop HDD market; instead, believes Marvell's only exposure to Seagate is the enterprise HDD market, which is strong, according to Seagate as well as firm's own checks.
9:24AM Zoran announces digital TV and Set Top Box ICs in Motorola Cable products (ZRAN) 22.20: Co announced that its Generation9 ICs and software will be used in new digital cable-ready receivers and the Digital Convergence Platform (DCP) from Motorola Broadband. Zoran's ZDX technology allows standard-definition or high-definition CRT, LCD, PDP, and other analog or digital displays to exhibit the best quality video for each display type. ZDX programmability allows OEMs to match the quality of the application.
9:07AM Notable Mentions: HPQ, Semi Cap Equipment : Hewlett-Packard (HPQ): Prudential says recent checks indicate that FQ1 is progressing well for HP, reinforcing firm's confidence in its estimates for revenue of $19.5B (-1.6% Q/Q) and EPS of $0.35; firm raising Q2 est to $0.34 due to increased confidence that cost reductions can translate into earnings improvement.... Semi Cap Equipment: Prudential's field checks indicate that over the past six weeks,TSMC has not been offering any volume discounts and has even been able to raise prices in some instances. This has been the first instance of a price increase at TSMC in the current cycle; firm's checks also suggest TI has invited Nikon to participate in its 300mm scanner bake-off for DMOS 7. Currently, ASML is the supplier of 300mm scanners for TI at DMOS6 but Nikon has been the incumbent for 200mm.
9:04AM NOK raised to Buy at Wells Fargo; tgt $35 21.10: Wells Fargo is raising rating on Nokia to Buy from Hold (price target $35) based on recent data from the co's exposure to the cell phone supply chain and NOK's current valuation relative to its peers. Firm is changing their view on handset ASPs and now believe that they will stabilize in 2004 from 2003 levels. Firm expects to see high-end phone units selling better than originally anticipated.
8:45AM Kulicke & Soffa earnings update (KLIC) 16.64: -- Update -- Reuters Research is telling us that excluding $6.2 mln in charges related to redemption of convertible notes, KLIC made $0.05 per share, in line with Reuters Research consensus of $0.05.
8:19AM Notable Mentions: SONS, JDAS, NPD data : Sonus Networks (SONS): Lehman reiterates its Underweight rating after SONS delayed their earnings release last night, saying their auditors were unexpectedly delayed, while firm has no reason to believe that the final audited results should be disappointing, they say the stock is priced for perfection and do not recommend investors take advantage of any decline until further information comes out... JDA Software (JDAS): Piper Jaffray believes that missed qtr provides a buying opportunity, as firm believes the weakness is timing rather than competitive losses... December NPD Data: UBS says Dec software dollar sales rose 13%, which was in line with expectations. Firm reiterates view that holiday season was okay, but not great. Thinks 2004 could be stronger than 2003.
8:05AM Integrated Circuit reports in line (ICST) 29.53: Reports Q2 (Dec) earnings of $0.26 per share, in line with the Reuters Research consensus of $0.26; revenues rose 12.3% year/year to $69.6 mln vs the $69.5 mln consensus.
Seagate Technology (STX): CSFB believes STX has set the bar low enough that the next earnings surprise should be positive making the stock attractively valued in the mid teens... Wireless Tower Stocks: Goldman Sachs comments that over the past week shares of tower stocks have been under pressure with AMT down almost 13%, SSI down 5% and CCI down 3% - while the broader market has moved higher. Investors continue to be concerned that wireless carrier consolidation will have immediate negative impact on tower companies. Firm continues to believe that perception is worse than realty and reiterate our positive view on the sector.
8:04AM MOT raised to Buy at Wells Fargo; tgt $22 17.05: Wells Fargo is raising rating to Buy from Hold based on broad improvement in all Motorola segments and expectations for increasing handset ASPs in Q1. Firm is also establishing a price target of $22.00. Firm believes current valuation (30.0x Y05 EPS estimate of $0.74) is reasonable given the sharp change in the industry to more positive pricing dynamics and valuations of competitors such as QUALCOMM (QCOM), which trades at 33.1x firms FY05 EPS estimate but has less room for improvement than does MOT.
7:53AM WSJ comments on chip stocks soaring once again --WSJ : The Wall Street Journal's "Heard on the Street" column suggests semiconductor stocks continue to garner interest despite lofty prices. According to the article, money managers and analysts focused on chip stocks believe lofty valuations in the sector aren't as risky as they may seem, though investors will likely have to get more judicious about where they invest in the industry this year. Optimists believe despite the recent stock gains, there is still money to be made in chip stocks given earnings estimates continuing to rise, which adjusts today's lofty multiples into a more comfortable range. While chip stocks may be expensive, you still are getting valuable earnings momentum for the money. In addition, S&P recently issued a 102-page report that says chip stocks could rise 20% to 25% in the next 12 months. The analysis is based not on price-to-earnings multiples but a more complex mix of qualitative and quantitative factors. The article suggests one approach for semiconductor stockpicking is to target companies with diversified product lines that are less subject to sudden reverses. S&P, for example, recommended three broad-line makers of analog chips which included LLTC, ADI and MXIM.
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