) to buy from hold.
Analyst Timothy Arcuri upgraded the entire chip-equipment sector to buy. Arcuri says he sees first quarter 2003 equipment order growth of 15%-20% sequentially, vs. the flat to 10% consensus.
He also upgraded Lattice Semiconductor and Novellus to buy from hold. Arcuri notes increased orders in the first quarter from Intel, Samsung, IBM, and others. He says these three companies are not cheap, but says the risk/reward balance is attractive. He notes the following industry risks: Weak DRAM orders, a conservative guidance from chip makers, and weakness due to seasonality in the first quarter.
Arcuri raises his 28 cents calendar 2003 earnings per share estimate on Applied Materials to 35 cents, and upped the 59 cents calendar 2004 estimate to 60 cents. He raises the $5.4 billion calendar 2003 revenue estimate to $5.8 billion, and eased the $7.1 billion calendar 2004 estimate to $7.05 billion.