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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (9838)	5/17/2003 8:02:44 PM
From: Return to Sender	Respond to of 95663

Semiconductor Equipment . . . Semi Equipment book-to-bill disappointed as the book-to-bill ratio fell to 0.86 in April well below the 1.01 consensus. Fulcrum believes that the significantly lower than expected orders report could create a downward pressure on the wafer processing equipment stocks. However, firm would consider the possible decline of Buy rated stocks Applied Materials, Novellus, KLA Tencor, Lam Research and Cymer as a buying opportunity. Believes that stronger than expected Book-to-Bill for the back-end equipment at 1.21x could provide additional support for the semiconductor test equipment stocks like Credence Systems, LTX Corporation and Teradyne. Coherent defended by CIBC and says that yesterday's pullback on UBS Warburg's downgrade provides an attractive accumulation opportunity. The firm finds UBS's 20x multiple too conservative given COHR's high diversification of end-markets, track record of profitability, and long-term secular growth opportunities for photonics laser-based products, and believes a 25-30x multiple is more in-line with tech company's with above-average track records. Target is $47. Boxmakers . . . Dell reported rev/EPS of $9.53 billion/$.23 in line with estimates led by strong enterprise (+26%) and related enhanced services (+45%) growth; client PC rev growth (+12-13%), while solid, was short of estimates. 2nd quarter guidance of $9.7+ billion revenue and $.24 EPS, in line with numbers, though the revenue guidance may be just a shade shy of some on Street (closer to $9.8 billion). 2nd quarter is seasonally softest for corporate and consumer buys; enterprise mix may provide offset to aggressive client PC pricing. Execution flawless and the model has legs; but shares now trade at 1.9X relative PE on year forward basis, versus 2.0-2.4X (ex spikes) in peak 98-99 bubble period and 1.0-2.0X of past 7 years ex bubble. Dell continues to expand global PC market share at the expense of Hewlett Packard and others. While doubt that the printer business had more than a nominal impact in the Quarter, Dell confirmed a strong start with sales roughly 2X expectations. Dell server units +40% Year/Year. 2 and 4 ways encroaching on Sun Microsystems low end and midrange. EMC revenue in Quarter from external storage systems which though up 67% Year/Year was up less than 3% Quarter/Quarter. Despite first-quarter results that met expectations, Smith Barney analyst Richard Gardner lowered his rating on Dell Computer to "in line" from "outperform," citing valuation. At its current multiple to forward earnings, Gardner believes the shares are "rich," leaving limited upside potential over the next 12 months. Gardner has a $32 price target on the stock. Hewlett Packard was added to Smith Barney Recommended List. The firm is removing Dell. 2020insight.com