Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Novellus -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (2477)	10/13/1999 1:50:00 PM
From: JustMy2Cents	Read Replies (1) \| Respond to of 3813

Novellus NVLS M E R R I L L L Y N C H Research Bulletin Electronics - Semiconductor Capital Equipment Reference Number 10128535 United States Oct/12/99 09:38 Mark F. FitzGerald (1) 415 676-3550 BUY* Long Term BUY Reason for Report: 3Q99 Earnings Announcement Price: $72 15/16 12 Month Price Objective: $100 Estimates (Dec) 1998A 1999E 2000E EPS: $1.51 $1.72 $3.35 P/E: 48.3x 42.4x 21.8x EPS Change (YoY): 13.9% 94.8% Consensus EPS: $1.59 $3.00 (First Call: 16-Sep-1999) Q4 EPS (Dec): $0.23 $0.63 Cash Flow/Share: $1.16 $1.48 $2.59 Price/Cash Flow: 62.9x 49.3x 28.2x Dividend Rate: Nil Nil Nil Dividend Yield: Nil Nil Nil Opinion & Financial Data Investment Opinion: B-1-1-9 Mkt. Value / Shares Outstanding (mn): $2,990.4 / 40.6 Book Value/Share (Sept-1999): $17.23 Price/Book Ratio: 4.2x Est. 5 Year EPS Growth: 30.0% Stock Data 52-Week Range: $75 7/8-$24 7/8 Symbol / Exchange: NVLS / OTC Options: Chicago Institutional Ownership-Spectrum: 70.7% Brokers Covering (First Call): 22 ML Industry Weightings & Ratings** Strategy; Weighting Rel. to Mkt.: Income: Underweight (07-Mar-1995) Growth: Overweight (13-May-1999) Income & Growth: Overweight (13-May-1999) Capital Appreciation: Overweight (10-Feb-1999) Market Analysis; Technical Rating: Above Average (26-Jan-1999) Intermediate term opinion last changed on 08-Feb-1999. *The views expressed are those of the macro department and do not necessarily coincide with those of the Fundamental analyst. For full investment opinion definitions, see footnotes. Investment Highlights: o NVLS reported 3Q'99 revenues of $155 million and EPS of $0.54 versus our projection of $145 million and $0.46. Capacity buys in Asia accounted for 50% of revenues. NVLS Change in Projections (FY December) FY99 FY00 New Revenues (millions) $573 $845 EPS $1.72 $3.35 Old Revenues (millions) $548 $828 EPS $1.59 $3.34 o Quarterly bookings were a record; we estimate in the $205 million range. We estimate backlog at the end of the quarter is in the $225-235 million range. o The company has the strongest new product pipeline in the sector given its size. We think design wins over the next six months will translate into meaningful revenue growth in the second half of 2000. o The stock has the biggest upside potential of the larger cap stocks in the group. We have a price objective of $100 assuming a 30 multiple on CY'00 EPS of $3.35 (NVLS) The securities of the company are not listed but trade over-the-counter in the United States. In the US, retail sales and/or distribution of this report may be made only in states where these securities are exempt from registration or have been qualified for sale. MLPF&S or its affiliates usually make a market in the securities of this company. Opinion Key (X-a-b-c): Investment Risk Rating(X): A - Low, B - Average, C - Above Average, D - High. Appreciation Potential Rating (a: Int. Term - 0-12 mo.; b: Long Term - >1 yr.): 1 - Buy, 2 - Accumulate, 3 - Neutral, 4 - Reduce, 5 - Sell, 6 - No Rating. Income Rating(c): 7 - Same/Higher, 8 - Same/Lower, 9 - No Cash Dividend. Copyright 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). This report has been issued and approved for publication in the United Kingdom by Merrill Lynch, Pierce, Fenner & Smith Limited, which is regulated by SFA, and has been considered and issued in Australia by Merrill Lynch Equities (Australia) Limited (ACN 006 276 795), a licensed securities dealer under the Australian Corporations Law. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Additional information available. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments"). MLPF&S and its affiliates may trade for their own accounts as odd-lot dealer, market maker, block positioner, specialist and/or arbitrageur in any securities of this issuer(s) or in related investments, and may be on the opposite side of public orders. MLPF&S, its affiliates, directors, officers, employees and employee benefit programs may have a long or short position in any securities of this issuer(s) or in related investments. MLPF&S or its affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this report. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.