Stifel Cuts Estimates in Semi Sector

On thing I’ve been seeing a lot of in recent sessions is analysts making wholesale cuts in earnings and estimates and price targets on groups of stocks in response to to worsening economic environment. Goldman, for instance, has sliced estimates for a host of software stocks. RBC did the same on communications equipment stocks. And here’s one more example: Stifel Nicolaus analyst Patrick Ho Tuesday morning brought down his 2008 estimates for the semiconductor equipment sector.

Ho cut his estimates on Cymer (CYMI), KLA-Tencor (KLAC), Lam Research (LRCX), FormFactor (FORM), Mattson (MTSN), Novellus (NVLS) and Teradyne (TER). In a few cases he also cut price targets. The basis issue a familiar one: he’s anticipating worsening fundamental demand has we head further into 2008.

Here’s a run down on his moves this morning:

• Cymer: Target to $52 from $55. 2008 EPS to $2.90 from $3.50. “While we continue to hold a favorable stance over Cymer’s long-term growth prospects…we are more concerned over current industry conditions, which may impact the timing of shipments and revenue,” he wrote.
• KLA-Tencor: Target to $60 from $67. FY June 2008 EPS to $3.32 from $3.70. “The biggest issue that faces KLA-Tencor in the near term lies with the timing of memory orders,” he writes. “Checks indicate an increasing sense of caution and this could lead to push outs that would impact the timing of shipments and revenue recognition.”
• Lam Research: Target to $60 from $67. FY June 2008 revenue estimate to $2.5 billion from $2.6 billion; no EPS estimates due to option probe. Lam, he says “is likely to experience some near-term bookings choppiness.”
• FormFactor: 2008 EPS estimate to $1.52 from $1.90. “We continue to have concerns over the company’s near term execution and the intensifying competitive environment,” Ho writes.
• Mattson: 2008 EPS estimate to 50 cents from 62 cents. “Given the current market conditions and the volatile nature of Mattson’s business…we believe it is prudent to take a more conservative stance our our forward estimates for the company.”
• Novellus: 2008 EPS estimate to $1.67 from $1.95. “Current industry conditions will not provide any near-term boost for the company, as we suspect order flows are likely to worsen rather than improve over the next few months.”
• Teradyne: 2008 EPS to 55 cents, from 76 cents. “With the uncertainty over current demand trends, we believe chipmakers and their respective [subcontractors] have further pared back spending trends for new capacity additions until some clarity is presented.”