April 16, 2007, 9:30 am
KLA-Tencor: RBC Downgrades; Concerns On June Orders
Posted by Eric Savitz
Mahesh Sanganeria, an analyst at RBC Capital Markets, this morning cut his rating on KLA-Tencor (KLAC) to Sector Perform from Outperform. “After the recent run-up powered by accelerated share buyback and head count reduction…the stock has made significant advance towards our price target,” he wrote in a note this morning.
Sanganeria says he is cautious on the stock for three reasons:
* Near-term concerns related to June order expectations.
* Slowdown in operating expense reductions.
* Long-term concerns related to process control spending as a fraction of overall semi equipment spending.
He says March orders should be better than company guidance of down 5% sequentially, but that June expectations for orders may be too high. He expects the company to guide to orders flat to down 5% for the quarter.
KLA this morning is down 55 cents at $54.17.
