(Source: Associated Press/AP Online)
SAN FRANCISCO - A Credit Suisse analyst upgraded Novellus Systems Inc. shares to "Outperform" Monday, citing several reasons including an expectation that Samsung Electronics Co. will raise its 2010 capital expenditures - something that could benefit Novellus.
In a Monday client note, Credit Suisse analyst Satya Kumar increased his rating from "Neutral" for the chip equipment maker's and raised his price target by $6 to $29.
Kumar said checks indicate Samsung will increase its 2010 capital expenditures to about $4.5 billion. Checks also imply the company may upgrade some chip factories to produce a new kind of DRAM - or dynamic random access memory - chip, he said.
"In this cycle, NVLS has excellent leverage to the key spenders Samsung, TSM and Intel," he said.
He also noted that Samsung gave Novellus a valued supplier award last week, which shows its market position is improving.
In addition, prices for DRAM have risen more than 200 percent since the fourth quarter of last year, he said, and have risen 29 percent in the third quarter over the second quarter so far. Ongoing strength in DRAM prices is good for semiconductor capital equipment companies, he said.
Novellus shares rose 41 cents, or 2 percent, to $20.92.
A service of YellowBrix, Inc.
