First Albany Lowers KLA-Tencor to Neutral
First Albany downgraded KLA-Tencor (KLAC ) to neutral from buy.
Analyst Auguste Richard says while third-quarter revenue, gross margin, and earnings per share beat his estimates, bookings growth fell short. As such, he downgraded to neutral from buy. He notes third-quarter bookings rose 18% sequentially, vs. his 20% to 30% estimate.
Richard adds that fourth-quarter bookings guidance was weak, with a wide range of up 10% to down 15% sequentially. While he expects bookings to grow in the fourth quarter, he says growth is decelerating faster than he expected. Given the current valuation, he thinks the stock will trade lower, and says he would be more "constructive" in the high $30s. He upped the 40 cents fourth-quarter earnings per share estimate to 46 cents, but cut the $63 target to $44.