Prudential Turns Negative On Semiconductor Issues
Prudential cut its investment recommendations on the semiconductor companies Mattson Technology (MTSN ), KLA-Tencor Corporation (KLAC ), and Lam Research( LRCX ) on Thursday, explaining that their industry faces sluggish growth.
Analyst Ben Pang moved the sector to unfavorable from neutral, Mattson to underweight from neutral, and both KLA-Tencor Corporation and Lam Research to neutral from overweight.
Pang cited factors such as peaking utilization rates and projected 7% lower capital spending budgets in 2006. He cut his price target on Mattson to $7.50 from $8. Although Mattson made significant improvements in operating leverage, Pang thinks the company's continued improvement could be curtailed by sluggish industry growth.