business

Needham Upgrades Ultratech Stepper to 'Buy'

Analyst Cristina Osmena says the equipment maker is highly exposed to bump wafer processing, which is being widely adopted in the chip industry

Needham upgraded Ultratech Stepper (UTEK ) to buy from hold.

Analyst Cristina Osmena says she thinks the chip-equipment maker is poised to enjoy better fundamentals relative to the broader equipment industry in the near term, based on its high exposure to the industry-wide adoption of bump wafer processing.

Osmena notes Ultratech has lowered its breakeven level such that cash levels have remained stable for three quarters. She notes better than expected revenue, a smaller than expected loss, and a book-to-bill ratio above 1.1 in the first quarter, demonstrating industry-superior performance.

She narrowed the 27 cents 2003 loss estimate to a loss of 6 cents, and raised the 7 cents 2004 earnings per share estimate to 34 cents earnings per share. She initiatesd a $15 target.

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