Piper Jaffray Upgrades Veeco Instruments to Overweight (VECO)

Piper Jaffray is out with a research report this morning, where it upgrades shares of Veeco Instruments VECO to Overweight, from Neutral; it has a $62.00 price target on the stock, up from $38.50. The PJ analysts said that they expect VECO to gain share against Aixtron as Chinese orders for MOCVD reactors increase in 2011 and 2012 driven by Chinese government subsidies likely to last through 2012. The analysts estimate VECO's share of the Chinese market at over 50%. Additionally, they have early indications of a next generation, multi-chamber MOCVD reactor being beta tested by VECO, which could be announced in 1H11. As for valuation, the analysts remarked, “We value VECO in line with the current peer average at 11x 2012 EPS of $5.60 to arrive at $62. Our previous price target of $38.50 was based on 11x our previous 2011E EPS of $3.50.”