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

To: kdavy who wrote (12523)	11/14/2003 7:38:10 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95503

Semiconductor Equipment . . . Merrill Lynch out of Europe downgrades ASML Holding to Neutral from Buy based on valuation, as the stock has exceeded their target; also, although the analyst day met their high expectations, it did not lead them to increase their through-the-cycle margin (15%) and growth assumptions (12%) for the co. Semiconductors . . . JMP Securities is maintaining its Outperform rating and $35 target on Intel following cautious optimism on rebound for its flash memory unit during its Wireless Group Analyst Day. Intel's Flash memory/Wireless Communications Group, at its Analyst day in Sacramento yesterday, painted a cautiously optimistic picture for a return to growth and potentially sustained profitability for the Group in 2004 and beyond. While flash memory pricing has stabilized due likely to strong unit demand and seasonal strength in color-screen, camera/web-enabled cell phones. The firm believes that Intel faces a tough challenge in winning back market share against resurgent competition from A.M.D., Samsung, ST Microelectronics, and emerging Taiwan players such as Winbond, Macronix, etc. Boxmakers . .. Dell delivered in-line 3rd quarter 2004 results that were slightly below our model as it passed on low-end business and noted intensely competitive pricing, though it was positive at the margin on its outlook for corporate spending from hardware refreshes. Dell’s outlook remains solid from its strengthening enterprise and consumer position and many secular growth drivers. Looking at collateral impact, Dell’s results imply that H-P could show revenue upside (helped by channel fill) but also see margin pressures owing to PC pricing and mix, which H-P has likely offset by less aggressive pricing in printers. Dell confirmed it is working with a printer vendor other than LXK to launch products in 2004. As to the component outlook, LCDs remain tight but DRAM is easing. Dell reported typical results with in-line EPS at $0.26 (vs. $0.21), still below our $0.27 estimate, on stronger revenues of $10.62 billion (up 16% Year/Year) paced by enterprise (up 25% Year/Year), notebook (up 31% Year/Year) and strength in U.S. consumer (units up 28%). Gross margin was slightly better at 18.2% from improved mix, but total unit growth of 22% Year/Year was below its 25% forecast as Dell conceded low-end sales. While lowering fiscal 4th quarter 2004 estimates, there’s no change to our 2005 (Jan) EPS of $1.25 on revenues of $49.1 billion (up 18% Year/Year) and 2006 of $1.50 on revenues of $57.3 billion (up 17% Year/Year). For fiscal 4th quarter 2004 (January), analysts are lowering EPS from $0.29 to $0.28 (vs. $0.23 last year) on slightly lower revenues of $11.59 billion (versus $9.7 billion) -- guidance calls for EPS of $0.28 on revenues of $11.5 billion. With strong customer interest and adoption coupled with the long-term trends toward use of lower-cost, Intel-based (Linux and Microsoft) server systems, Dell clearly stands to be the key beneficiary with its low-cost model, driving volume and share gains, and at the same time, helping Dell improve its profitability with an increasing mix of enterprise systems. We see the shift from proprietary RISC/UNIX systems to the Intel platform as a secular trend in Dell’s favor, as Dell is currently the No. 1 vendor in Intel servers in the U.S. and the #2 vendor on a worldwide basis. robblack.com Looking forward to it kdavy!