KLA-Tencor (NASDAQ:KLAC) had a decent quarter, according to Barclays, and should do fairly well in 2011, although GMs could remain under pressure. They like ASML (Nasdaq:ASML), Varian (Nasdaq:VSEA) and Teradyne (NYSE:TER) better in the sector.
Barclays says, "Overall, this was a good quarter for KLAC, notwithstanding a less favorable mix, which weighed on GMs. Looking ahead, we think that the favorable foundry and logic capex mix should help KLAC achieve a $3B+ run rate quite easily, though the metrology and reticle inspection intensive nature of foundry spend might keep a lid on GMs. To this end, we raise our CY11 revenue/EPS to $3.24B/$4.80 (cons $2.8B/$3.93) and introduce CY12 at $3.25B/$4.90 (cons $2.8B/$3.91)...Given our positive view on the cycle, the shares should work - however, at this point, we see greater upside for our favorites, in particular, ASML Inc (ASML), Varian Semi (VSEA) and Teradyne (TER)."
Barclays maintains an 'Equalweight' on KLA-Tencor (KLAC), which closed Friday at $43.69, down $0.99, or 2.22 percent. Barclays raised their price target on KLA from $50 to $53.
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