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Mahesh Sanganeria, an analyst at RBC Capital Markets, yesterday morning cut his rating on KLA-Tencor (KLAC) to Sector Perform from Outperform. “After the recent run-up powered by accelerated share buyback and head count reduction… the stock has made significant advance towards our price target,” he wrote in a note.

Sanganeria says he is cautious on the stock for three reasons:

  • Near-term concerns related to June order expectations.
  • Slowdown in operating expense reductions.
  • Long-term concerns related to process control spending as a fraction of overall semi equipment spending.
  • He says March orders should be better than company guidance of down 5% sequentially, but that June expectations for orders may be too high. He expects the company to guide to orders flat to down 5% for the quarter.

    KLA yesterday morning was down 55 cents at $54.17.


    KLAC 1-yr chart
    klac chart 170407

    Source: KLA-Tencor: Concerns Over June Orders