Thursday, Credit Suisse upgraded Cymer Inc. (CYMI) shares to Outperform from Neutral and increased its price target to $49 from $41.
Analyst Kumar said that key reasons for the upgrade are upside to units and potentially higher spares revenues. The analyst believes lithography will outgrow semicap as productivity of litho tools is not keeping pace with rate of ASP increases. CYMI with its leading market share position in immersion litho is a direct beneficiary from this. The analyst is bumping up total laser units in calendar 2011 from 84 to 104. (From 76 to 87 for ArF and from 8 to 17 for KrF).
The analyst noted that CYMI has steadily increased its non system revenues from ~$105 million in calendar 2003, 40% of total revenues, to a peak of $307.5 million in calendar 2008, 67% of total revenues. Given the increase in ArF immersion install base, the analyst is modeling spare revs in the next cycle to increase to ~$349 million in calendar 2011, 63% of revenues, due to a higher value system upgrade business.
Currently, CYMI is up $0.77 or 2.00% and trading at $39.24.
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