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

To: Donald Wennerstrom who wrote (11461)	9/4/2003 11:49:35 PM
From: BWAC	Read Replies (2) \| Respond to of 95617

I'm looking at NSM numbers. They actually did well. Not near enough to justify their valuation, but still a decent quarter. Somewhere in the back of my head, I have this recollection that when NSM (and AMD) start doing well a turn for the worse is on the horizon.

To: Donald Wennerstrom who wrote (11461)	9/5/2003 5:30:59 PM
From: Return to Sender	Respond to of 95617

Semiconductors . . . Dresdner Kleinwort Wasserstein raised its rating on National Semiconductor to buy from hold, after the chipmaker posted quarterly sales that were at the top end of its expectations. DKW said it raised its rating "mainly due to an improving business model and resulting margin leverage. While we might be late in acknowledging this transformation, we believe there is still sufficient upside in the stock." Jabil Circuit target raised to $35 at UBS and reiterated as a Buy. They believe that with investor sentiment toward tech generally improving, investors are willing to pay a premium for company's that are "best in class" and have earnings leverage. Vishay target raised to $21 at UBS . The firm believes that the combination of potentially improving fundamentals, significant operating leverage, and superior product and end-market breadth will drive further multiple expansion. Intel announced its narrowing of its guidance from its previous $7.3-7.8 billion range to $7.6-7.8 billion for its upcoming 3rd quarter yesterday after the close. ThinkEquity's Charlie Glavin believes the announcement augurs well for the stock but has already been priced into the shares noting that INTC is up 20% since its Q2 earnings report vs. 4-6% gains for the SOX and NASDAQ, respectively. He suggests investors need to own INTC in order to maintain a position during this recovery, but should over-weight other mid-caps such as Marvell or Agere with higher revenue growth or other large caps like TXN with more mixed-signal depth or better margin expansion. However, Tom Thornhill at UBS is increasing his price target to $38 from $35 citing the co's raising its guidance again just two weeks after its last update. The analyst suggests Intel is gaining a great deal of share in chipsets and suggests emerging markets are driving desktop processors with back-to-school helping to drive notebooks. ON Semiconductor started with an Outperform at Soundview and $7 target. The firm is citing the company's improving fundamentals, tight focus on higher-margin opportunities under the new CEO, and aggressive cost reduction measures. The firm believes the highly cyclical nature of ONNN makes it an ideal investment candidate in a recovery. Texas Instruments target raised to $30 at Wedbush. The firm increases its 2003 estimates somewhat while significantly increasing its 2004E from $0.80 to $0.95 versus consensus of $0.64. Analysts recently met with representatives of NVIDIA. The primary concern analysts continue to have is the company's production costs on 0.13-micron. Though the company expressed the opinion that gross margins might bottom in the October Quarter as the cost is in fact getting lower, remain skeptical as expect the percentage of 0.13-micron production to rapidly increase from 15-20% of units currently. The fact that we are not seeing notable 0.13um cost or margin issues at other semiconductor companies suggests that NVIDIA's concerns might be related to its product designs. However, this may only be part of the reason as IBM has been able to lower the number of mask steps relative to TSMC on a 0.13um chip it is producing for NVDA. In any case, we forecast margins to decline further in the Jan-Quarter. Do not expect much of an impact this year from NVIDIA's production at IBM, given that production has only recently started and is for a product that is yet to be launched. For the October quarter, analysts are maintaining revenue growth estimate of 6.6% Quarter over Quarter, excluding the impact of the MediaQ acquisition, slightly above the 5-6% guidance. Including the acquisition forecast an 8.0% increase. Analysts have lowered overall estimates for the company based on lower gross margin assumptions. Forecast margins to decline slightly in October-Quarter and January-Quarter, and recover from the Apr-Quarter onwards. EPS estimates for 2003 and 2004 decline to $0.52 and $0.71, from $0.57 and $0.82. Analysts are lowering our gross margin estimate for the Oct-Q and Jan-Q from to 27.5% and 27.2%, from 28.0% and 28.5% previously. Expect ATI Tech to report above its August-Quarter revenue guidance of $335 million to $365 million (-2.1% to +6.7% Quarter over Quarter) provided in late June, based primarily on the strength in notebooks in the quarter. Analysts are raising revenue estimate from $352 million (up 2.7% Quarter over Quarter) to $380 million (up 11.1% Quarter over Quarter), and pro forma EPS estimate from $0.09 to $0.12 for the quarter. ATI is scheduled to report Aug-Quarter results on Oct 3. Though back-to-school usually accelerates only in September, latest checks in Taiwan point to 13% and 17% increase in motherboard and notebook shipments in the August-Quarter. ATI should be a prime beneficiary of the strength have seen in notebooks, given its dominant 59% share in the overall graphics market, with total notebook chips representing approximately 35% of the company's total revenues. In addition, ATI recently indicated that it expects to see further traction in the white box market in the next 1-2 months. There is a decent probability that recent speculation that Asustek will use ATI's GPUs in its own-brand graphics cards is true, and given ATI's momentum in the clone mkt in recent quarters, believe other graphics card makers may be inclined to offer ATI-based cards. During recent meeting with ATI, the company highlighted the desktop integrated and consumer businesses as growth catalysts for the company in fiscal 2004. The outlook for the consumer business appears to be better than the company's June guidance of $100 million in revenues for 2004, and analysts are raising consumer revenue forecast for the year from $115 million to $140 million. Boxmakers . . . SG Cowen says that Supercomputer-maker Cray gave a very upbeat presentation at their Tech Conference, and firm was very impressed with the company's funding prospects, product transitions, and the new VP of Sales and Marketing (who came from IBM). The firm is now more confident with their above-consensus numbers and says 2005 could be a tremendous year as the company's Red Storm turns into a commercial product. Analysts expect the company to grow 2003 EPS by 100% to $0.28 (P/E 46.8x), and to grow 2004 EPS by 75% to $0.49 (P/E 26.7x). Market cap: $925 million, float: 69 million shares, average daily volume: 1.2 mln shares, short interest: 12%. In view of Intel's guidance of 11.5-14.4% sequential revenue growth for the September Quarter, Bear Stearns is raising its estimates and price target for Dell. 2004 estimate goes to $1.03 from $1.00 and 2005 est to $1.25 from $1.20, while 2003 year-end price tgt increases to $37.50 from $36.00 (based on 30x 2004 est). Firm's year-end 2004 price tgt is $45, which reflects a 30x multiple on 2006 estimate of $1.50. RobBlack.com MarketWrap robblack.com