AMAT May Get $2.8 Billion-Worth Of Orders

Analysts at Citigroup maintain their "hold" rating on Applied Materials Inc AMAT, while raising their estimates for the company. The target price for AMAT is set to $14. Although AMAT hasn’t provided any order guidance, the analysts “see orders potentially as high as $2.8B on the back of ~$1.55B silicon orders and ~$425MM solar orders.” According to Citigroup, the key issues related with Applied Materials are: “1) silicon share position still mixed (gaining inspection vs KLAC but still losing CVD share to NVLS and etch remains slow) but “brain drain” to solar has finally reversed itself; 2) more disclosure on cost save and/or potential liability (if any) from wind-down of SunFab as checks suggest major scale-back in efforts; 3) future technology development including ALD (Atomic Layer Deposition) for silicon and solar, MOCVD for LED, and some new storage technologies.” The analysts added that, “We see stock more likely up than down post print given combination of relatively benign valuation (~10x run-rate EPS based on likely guidance), under-performance vs. SOXX index YTD, and a strong Q.” Citigroup has raised its EPS estimates for 2010 and 2011 from $0.79 to $0.96 and from $1.11 to $1.24, respectively. More Analyst Ratings here