JP Morgan Maintains Overweight Rating And $75 PT On Veeco Instruments (VECO)

JP Morgan is reiterating its $75 Price Target and Overweight rating after Veeco Instruments VECO reported its Q4 earnings. “C4Q10 rev/PF EPS of $300mn/$2.32 vs. our model of $295mn/$1.53. Excluding the impact of a lower-than-expected tax rate, we note that EPS would have been in line with our estimate, while gross margin of 51% was also in line with our model. With respect to guidance, Veeco guided to C1Q11 rev/PF EPS of $215-265mn and $1.02-1.39, or well below our $305mn/$1.61 model, in large part driven by timing of revenue recognition on shipments for its newly released MOCVD system.” JP Morgan remains very optimistic about Veeco's future outlook noting Veeco is likely to “launch a multireactor system as its next-gen MOCVD platform, the MaxBright launch is several Qs ahead of our expectation. Given this timing is already close to a year ahead of the typical new product roadmap for Veeco, this suggests to us that Veeco is well-positioned to build on its market share gains from 2010 (from ~20% to ~50% in 12mos) versus simply maintaining them.” Veeco is currently trading $2.64 higher than yesterday's close of $45.14.