AG Edwards downgraded KLA Tencor (KLAC) to hold from buy.
Analyst Christopher Chaney says since early October, KLA has climbed more than 70%, yet prospects for the semiconductor or equipment markets haven't changed much. Chaney says a recent industry 0.73 book/bill ratio showed total orders are down again, albeit at a slower pace. Chaney considers the deceleration in order declines as a mildly positive sign, but not a turnaround indicator.
He still doesn't believe spending levels from chip makers -- KLA's customers -- will support impressive growth for equipment makers in 2003. Instead, he sees more robust growth in 2004 as utilization levels are expected to be higher in late 2003.