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Technology Stocks : Lam Research (LRCX, NASDAQ): To the Insiders -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (3852)	1/19/2000 10:11:00 PM
From: Jong Hyun Yoo	Respond to of 5867

Comments from SSB after Intel's decision to increase CAP-EX spending: Intel announced higher than expected capital spending plans of $5B, or up 47% year-over-year, vs. our est. of up 30%. This gives us more confidence in our equipment company growth rates of 50-70% plus in 2000. We had concerns that equipment growth was running too far ahead of semiconductor capex growth but this allays our fears a bit. We expect most equipment stocks to graduate to higher trading ranges and to begin discounting 2002 earnings. However, we believe it is necessary to be selective and to pick stocks which offer the best earnings upsides. Our top picks in this environment are Lam Research and Teradyne. Thursday, January 20 - Lam Research (LRCX, $130, 1H, Price Target - $98) announces 2Q00 results after the market closes with a conference call at 4:30EST. Our model calls for EPS of $0.72 (consensus - $0.72) and sales to increase 12% sequentially to $270 million. We look for bookings to increase 20-25% sequentially from the $280-285 million reported in the September quarter. Given the strong capacity buys from the Taiwanese foundries, we believe our sales/earnings estimate is conservative and we look for nice upsides. We believe Lam can report sales above $280 million and EPS $0.05 above our estimate due to gross margin upsides and better operating expense leverage.