Salomon Smith Barney upgraded Lam Research (LRCX ) to buy from outperform, and raised the price target. Salomon also raised its targets on Applied Materials (AMAT ), Axcelis Technologies (ACLS ), Entegris (ENTG ), KLA-Tencor (KLAC ), Nanometrics (NANO ), and Novellus (NVLS ).
Analyst Glen Yeung says he expects bookings inflection in May will become apparent. He believes June 21 book-to-bill numbers are likely to be a near-term catalyst for stocks. He says anecdotal evidence supports the outlook for improved second half bookings over the first half. Yeung says he has extensively modeled the 2002 to 2003 upcycle, and believes there's still significant cycle-to-cycle upside in these names. He has also modeled EPS scenarios for companies in his universe to support these valuations.
Yeung's favorites remain Axcelis, KLA-Tencor, Novellus and Lam Research.