Markets & Finance

Prudential Turns Negative On Semiconductor Issues

Prudential cut its investment recommendations on the semiconductor companies Mattson Technology (MTSN

), KLA-Tencor Corporation (KLAC

), and Lam Research( LRCX

) on Thursday, explaining that their industry faces sluggish growth.

Analyst Ben Pang moved the sector to unfavorable from neutral, Mattson to underweight from neutral, and both KLA-Tencor Corporation and Lam Research to neutral from overweight.

Pang cited factors such as peaking utilization rates and projected 7% lower capital spending budgets in 2006. He cut his price target on Mattson to $7.50 from $8. Although Mattson made significant improvements in operating leverage, Pang thinks the company's continued improvement could be curtailed by sluggish industry growth.

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