Gottfried, IMO the upgrade from CSFB yesterday was a really, really big deal!
<<Upgrading to Outperform. In a separate piece we also have out today, we are upgrading semiconductor equipment sector weight from Marketweight to Overweight.>>
Message 22803584
<<We are upgrading our sector weight on Semiconductor Capital Equipment from a Neutral to an Outperform. We are also upgrading AMAT from a Neutral to an Outperform and raising CY07 rev/EPS from $8.90bb and $1.03 to $9.85bb and $1.20, consensus is at $9.72bb and $1.10, and also increasing our price target from $18 to $20, representing an inline with peer-group EV/EBITDA multiple of 9.5x. We are maintaining our Outperform rating and $49 PT on LRCX; we think LRCX stock screens extremely attractively now – LRCX has solid leverage to all Taiwan DRAM companies; and in addition, valuations offer substantial upside on the stock. Note that we are
restricted on KLAC.>>
Message 22803642
This "upgrade" of the semi and semi-equip area has been a long time coming. Earlier this year, as was noted in many posts, CSFB was calling for a down 2H06. With these last 2 posts they have had to repudiate their position. The negative outlook by CSFB and many other firms caused stocks like AMAT to move very little to the good Bookings and Billings data of the last many, many months. You, and others, have written about this in several posts on the AMAT thread.
It is going to be very interesting to see where we go from here, but barring some very negative happening, the outlook for the semi/semi-equip area should be pretty good.
Don |
