Varian Semiconductor Equipment Associates "overweight," target price raised - update

06/19/08 - Lehman Brothers

NEW YORK, June 19 (newratings.com) - Analysts at Lehman Brothers maintain their "overweight" rating on Varian Semiconductor Equipment Associates Inc (VSEA), while reducing their estimates for the company. The target price has been raised from $48 to $50.

In a research note published this morning, the analysts mention that the company is likely to post its revenues and EPS for the June, September and December quarters short of the consensus. The analysts add, however, that margin expansion, resulting from a reduced tax rate, a rise in ASPs and an improved product mix, is expected to boost Varian Semiconductor Equipment Associates’ EPS by $4 by 2010. The EPS estimates for 2008 have been reduced from $1.47 to $1.44 and from $2.31 to $1.96, respectively.