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Credit Suisse First Boston downgraded Novellus Systems (NVLS
) to neutral from outperform.
Analyst John Pitzer says near-term bookings trends could disappoint and place pressure on the stock over the next several months. He believes geographic and customer exposure at Novellus isn't favorable for the second half of the year, placing both third-quarter bookings guidance and fourth-quarter bookings growth at risk.
Pitzer says a lack of exposure to key projects in the second half, rather than market-share loss, is the key culprit. He thinks Intel is slowing capacity expansions at its Fab 24 Fab 11x plants, which uses 90-nn process technology, due to better-than-expected yields at its 300-mm plant; Novellus is more dependent than most on Intel orders for fourth-quarter growth.
Pitzer has a 15 cents 2003 earnings per share estimate, and cut the $45 target to $35.