Citigroup Reiterates Buy Rating on Veeco Instruments (VECO)

Citigroup is out with a research report this morning, where it reiterates its Buy rating on Veeco Instruments Inc. VECO; it has a $52.00 price target on the stock. The Citi analysts said, “EPS (non-GAAP) $1.01 well above our/Street $0.87 on better revs/lower opex. Orders of $347MM were far better than our high-on-Street $300MM. EPS guide ~$1.33 (non-GAAP) mid-range or nearly 1Q ahead of our high-on-Street model. No specific order guide but, much like last Q, orders implied up.” They cited three key positives for the company, “1) Shipment ramp ahead of schedule and we see VECO shipping ~140 tools in CQ4 versus ~120 guide; 2) selling prices rising despite fears to the contrary; 3) China pipeline should prevent a big order decline.” They also cited two key negatives, “1) LED CQ2 tool orders at ~950 tool/yr run rate industry wide, or the first Q where “supply” has now caught up to our view of underlying demand; 2) LED/solar margins have not improved in past 2Qs despite 2x revs.”