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 : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Israel who wrote (8974)	11/1/2000 11:58:57 AM
From: herenow_2	Read Replies (1) \| Respond to of 10921

Briefing. Com on Morgan Stanley downgrades: Chip Equipment Stocks : There has been more bad news today for these beleagured stocks as Morgan Stanley Dean Witter analyst, Jay Deahna, is the latest analyst to revise his previously bullish stance. In his research note, Deahna cited end market weakness in PCs, low expectations for telecom equipment spending in 2001, and concerns about macro-economic growth patterns for his capitulation. Taking each of these considerations into account, he noted that he has now become increasingly cautious about chip makers' 2001 capital spending plans, and because of those reservations, he could no longer justify his bullish case for the chip equipment makers. Subsequently, he chose to downgrade four stocks-- Applied Materials (AMAT -1 1/2), Advanced Energy (AEIS -1/4), KLA-Tencor (KLAC -1), and Lam Research (LRCX -7/16)-- which had STRONG BUY recommendations. In each case, the investment opinion was lowered to OUTPERFORM, but because Deahna believes the aforementioned companies will continue to see above-average revenue and EPS growth in 2001 relative to the equipment industry, he refrained from taking the rating all the way to NEUTRAL. Price targets for KLAC, LRCX, and AEIS were maintained at $60, $40, and $45 respectively, but in the case of AMAT, the price target was slashed to $60 from $120. In addition, 2001 EPS estimates for AMAT were reduced to $3.11 from $3.90. As for the remaining companies, KLAC's EPS estimate was reduced to $2.15 from $2.45; LRCX's to $1.71 from $2.55; and AEIS to $2.00 from $3.00. Outside of these specific changes, Deahna also said that he would likely be lowering numbers on most of the companies he covers. From a trading standpoint, he believes the chip equipment stocks will be range-bound until investors are convinced the chip industry growth rate is beginning to re-accelerate. His expectation is that such visibility will return by 3Q01. In the meantime, Deahna thinks the stocks will be sluggish until growth investors are convinced all of the bad fundamental news has been shaken out. Although he conceded that much of the bad news has already been discounted, Deahna also acknowledged that difficult comparison periods ahead should keep growth investors at bay. The fact that Morgan Stanley Dean Witter also cut its 2001 forecast for global semiconductor capital spending growth from 30+% to 10%-15% should simply compound concerns that the chip equipment stocks will be fighting an uphill battle for the next few quarters as traders are apt to use signs of strength as a selling opportunity.-- Patrick J. O'Hare, Briefing.com 10:59 ET ******