Morgan Stanley Raises Target on Novellus

Analyst Steven Pelayo notes management optimism that the fourth quarter was the cyclical low-point

Novellus Systems (NVLS ) sees $200-$210 million in fourth-quarter order bookings and EPS of 11 cents, excluding an expected charge. Morgan Stanley raised its price target on Novellus.

Analyst Steven Pelayo says Novellus reiterated its fourth-quarter revenue and EPS guidance. He says the company raised its bookings guidance from flat to down 10% to flat to up 5%. Pelayo notes that management is optimistic that the fourth quarter was the cyclical low-point, and sees broader follow-through in the first quarter of 2003 from U.S. integrated device manufacturers, DRAM makers, and Japan. He raised his $27 price target to $40. The analyst sees 2002 EPS of 27 cents, rising to 37 cents in 2003 and $1.00 in 2004.

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