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To: John Rowton who wrote (1496)	6/12/1998 11:10:00 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 3813

RESEARCH ALERT - Morgan cuts Applied, KLA-Tencor Reuters, Friday, June 12, 1998 at 10:15 NEW YORK, June 12 (Reuters) - Morgan Stanley said Friday it cut its ratings on semiconductor equipment companies KLA-Tencor Corp. (NASDAQ:KLAC). and Applied Materials Inc. (NASDAQ:AMAT). to outperform from strong buy. Morgan also cut its earnings outlook and stock price targets on both companies. -- Analyst Jay Deahna said the move was prompted by weak capacity utilization rates in the semiconductor industry and the increasing likelihood capital spending budgets will be cut further. -- Deahna cut his estimate of Applied's 1998 earnings estimate to $1.24 per share from $1.35 per share, and lowered the 1999 estimate to $1.00 a share from $1.85 a share. -- Applied's stock price target was lowered to $32 from $44. -- Deahna lowered his fiscal year 1998 earnings estimate to $1.82 per share from $1.86 a share, and cut the 1999 estimate to $1.25 a share from $2.05 a share. -- Morgan's new stock price target is $37. Copyright 1998, Reuters News Service