Merrill Ups Veeco Instruments to 'Near-Term Strong Buy'
Merrill Lynch upgraded Veeco Instruments (VECO ) to near-term strong buy from buy, and maintains its long-term strong buy rating.
Analyst Brett Hodess says he sees an improvement in several of the company's end markets, including semi equipment, nanotechnology equipment, and disk drive equipment. He sees a return to earnings per share and revenue growth in the second quarter. He says fundamentals are improving and maintains his $0.25 2002 EPS estimate, and $1.30 for 2003. He also believes estimates will prove conservative when the company reports its first quarter results.
Hodess says Veeco shares are trading only at two times the book value, and two times trailing revenues, which is half of the average valuation of semi-equipment companies. Hodess raised his $35 target to $40-$45.