Bank of America Merrill Lynch Rates Novellus At Buy

Bank of America Merrill Lynch is out with a research report on Novellus NVLS and it has a Buy rating and a $35 price target on shares. In a note to clients, Bank of America Merrill Lynch writes, "NVLS management lowered their bookings forecast from flat to down 20% to ‘down 15-30%', at the mid-point that would amount to a reduction of about $40M (~10 tools) compared to the prior forecast, attributed to the ongoing industry slowdown and continued weakness in DRAM spending (not a complete surprise given the lackluster PC data points and low DRAM pricing). While the management alluded to a slight uptick in foundry utilization rates, we don't view this as sufficient yet to help a broad based recovery in industry bookings. We maintain our Buy rating on NVLS given the earnings leverage and share gain potential once the order recovery begins." Shares of NVLS gained 11 cents yesterday to close at $27.97.