Deutsche Bank Maintains Hold Rating On Applied Materials Following Earnings Report

Applied Materials AMAT reported F4Q10 results that beat estimates and reported stronger than expected bookings. Despite the stronger bookings and higher backlog, Applied guided F1Q10 (Jan) down 8% to 15% q/q. Applied Materials also guided F2011 roughly flat y/y in semicap and AGS, while FPD and EES are both expected to decline sharply. Deutsche Bank maintains its Hold rating and $11 price target on nearterm outlook tracks largely in line with expectations and present valuations. Applied Materials is a market leader with a broad product and technology portfolio, in semicap equipment, flat panel display, and solar PV industries. Weighing the strong rebound in SCE and surge in solar PV capacity demand offset by a meaningful risk of over capacity, lofty growth expectations, and continued macroeconomic uncertainty, Upside risks include: acceleration in technology upgrade cycles, stronger-than- anticipated trough spending levels in logic, foundry, or both, and a recovery in non-SCE businesses. Downside risks include: a longer and deeper downturn in memory, market share losses, continued weakness in the FPD segment, and further delays in solar PV projects AMAT is trading higher at $12.62