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

To: Steve Fancy who wrote (3010)	10/20/2000 9:41:02 AM
From: Art Baeckel	Read Replies (1) \| Respond to of 3813

Robertson Stephens Daily Growth Stock Update Novellus Systems, Inc. (Nasdaq: NVLS) ($34.88) F2000 EPS: $2.33 from $2.31 F2001 EPS: $3.32 from $2.86 Strong Buy Sue Billat, Semiconductor Equipment/Foundries "Novellus reported third quarter earnings-per-share of $0.62, in line with the Street's estimates but missed our own 0.64 estimate," said Billat. "The company continues to build record bookings and backlog. We believe the book- to-bill was in line with the front-end industry average of 1.33 while backlog is exceeding the usual level of 1.5 times quarter shipment. Accordingly, we expect fourth quarter sales to increase significantly as Novellus ramps shipment to bring backlog down to more realistic levels. In our view, Novellus is well-positioned to take advantage of macro trends such as the acceleration in copper adoption and the transition to 300mm. We expect the company's low cost 300 mm PECVD tool Vector to ship more than 100 units in the first half of 2001, more than twice the ramp of any prior Novellus' tools. Moreover, based on our sources, Novellus' copper electroplating tool is currently the tool of choice for a significant number of chipmakers. We are raising our fourth quarter and 2001 earnings-per-share estimates. At 10.5 times our calendar 2001 earnings-per-share estimates, we believe Novellus is trading at a valuation unwarranted based on the ramp of the Vector tool and copper, as well as the company's position at Intel. Accordingly, we are reiterating our Strong Buy rating on the stock."