Deutsche Bank Reiterates Hold Rating on Applied Materials (AMAT)

Deutsche Bank is out with a research report this morning, where it reiterates its Hold rating on Applied Materials Inc. AMAT; it has a $12.50 price target on the stock. The DB analysts cited the company’s recent earnings report, which was better than expected due to stronger revenue growth; the analysts noted that this was offset by “lower margins in EES (driven by SunFab inventory write-off) and AGS.” The analysts noted that the decline in DRAM bookings, which were lower by 15% quarter over quarter. The said that, while bookings increased ~8% q/q, DRAM bookings declined, and are expected moderate further in the next quarter. As for valuation, the DB analysts noted, “Applied Materials is the SCE industry leader with a broad product and technology portfolio. Considering the strong near-term rebound in SCE and FPD cycles on business fundamentals offset by a challenged solar PV industry, clouded business visibility and continued macroeconomic uncertainty, we maintain our Hold rating, and value AMAT at ~14x C2011 EPS of $0.87 and 2.5x TBV of $5.06, or $12.50.”