UBS Warburg Upgrades Coherent to 'Buy'
UBS Warburg upgraded Coherent (COHR ) to buy from neutral.
Analyst Byron Walker says the chip equipment maker beat consensus estimates, excluding charges for restructuring, impairment, and other non-recurring items. Walker notes for the second quarter, Coherent is guiding to flat revenues and earnings per share in a broad range of two cents to 11 cents.
He raised his second quarter earnings per share estimate to eight cents from seven cents, but is keeping the 50 cents fiscal 2003 (Sept.) earnings per share and the 90 cents fiscal 2004 estimates. Walker says that throughout the difficult downturn, Coherent has remained profitable from operations, and is generating positive cash flow from operations. He also says the company's strong balance sheet is highly liquid.
He says his upgrade is based on the valuation of the stock, and is keeping his $24 target.
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