Does anyone want to comment on the following Bold Face print? Is there any possible way the consensus could be this far off? It seems to me two to three points from the consensus would be dramatic, but half the rate of growth? Would appreciate any insight anyone could shed. I am doubtful these guys really know anyting special since they were part of the crew who drove AMAT to $21 in '96.
Monday October 20 3:31 PM EDT
Applied Materials shrs slip, rating cut
NEW YORK, Oct 20 (Reuters) - Shares of Applied Materials Inc slipped on Monday after brokerage firm CS First Boston downgraded the stock, citing Wall Street's over-optimistic outlook for the semiconductor equipment sector.
Analyst John Geraghty downgraded shares of both Applied Materials and Teradyne Inc (TER), saying both could be vulnerable to profit-taking if investors questioned the outlook for a strong semiconductor equipment market in 1998.
Applied Materials stock lost 1-11/16 to 39-7/8 while Teradyne fell 13/16 to 49-7/8.
While both companies had strong managment teams, balance sheets and order books, Geraghty said in a research note that consensus forecasts for 15 to 20 percent growth in semiconductor capital spending in 1998 might be too high.
''We currently believe it will expand eight percent, which is below the consensus view,'' he said.
Because capital spending has increased in 1997, companies might also spend less in 1998, Geraghty said.
First Boston also said cash flows in the dynamic random access memory (DRAM) market continued to be hurt by a collapse in prices and overcapacity.
''Spending in this segment may slow down further after technology buys are completed over the next two quarters,'' he said. Geraghty also said there was now too much optimism in the equipment sector, and downward revisions to growth estimates could pressure shares. |
