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Technology Stocks : Azenta
AZTA 29.55-3.3%Nov 6 3:59 PM EST
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To: Proud_Infidel who wrote (819)5/25/2005 1:27:27 PM
From: Proud_Infidel  Read Replies (1) of 1138
 
Brooks Automation Has 'Subdued View' For 2nd Half
05.25.05, 1:11 PM ET

Credit Suisse First Boston maintained a "neutral" rating on Brooks Automation (nasdaq: BRKS - news - people ) after the chip equipment maker reiterated in-line third-quarter guidance at a recent meeting with analysts. "Overall the company had an upbeat presentation highlighting improvements to the operating model and growth drivers into the next upturn, but still has a subdued view of the second half of calendar 2005," said CSFB. The research firm said the "biggest outsourcing target" for Brooks remains the vacuum and atmospheric automation business at Applied Materials (nasdaq: AMAT - news - people ), a potential $400 million opportunity. "We thought it was interesting that Brooks alluded to Applied Materials multiple times during its presentation," the firm noted. CSFB said Brooks is set to benefit from a rise in original equipment manufacturer (OEM) outsourcing and pointed out that management has maintained vigilance in controlling costs. "Despite improving execution, Brooks, at 0.9 times and 13.9 times calendar 2004 peak revenues and EPS, trades at a 20% to 25% discount to OEM subsystem peers--a gap we believe will begin to close into and during the next upturn," it said. "Investors able to see through the downturn could look for entry points here and into the lower teens; we would be more constructive here if/when we get more comfortable about sustainability of profit/revenue growth." CSFB maintained a $15 price target on Brooks. The firm rates Applied Materials at "neutral" with a $16.50 price target.
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