Bank Of America Lowers PT On NVLS

Bank of America is lowering its price target from $42 to $39 but still maintains its Buy rating on Novellus Systems NVLS, citing foundry concerns. In the report, Bank of America writes, “NVLS guided Sep (3Q) orders flat to down 20%, after a Q/Q dip of 25% in June. The weak outlook was due to continued push outs in the foundry segment. The Q3 orders are 32% below their 1Q highs; given our bottoms up CY12 semi unit estimate of +8% we expect Q4 bookings to rebound, implying this could be more of a mid-cycle correction. With NVLS re-setting expectations, the focus shifts to next year. We reduce our estimates but still maintain our Buy as we expect share gains, earnings power ($3.75+ in CY12) & buybacks ($450M) to provide support around current levels.” NVLS closed yesterday at $35.77.