Novellus Systems Inc. (NASDAQ:NVLS) reports earnings after today’s close. First Call estimates were $0.44 EPS and $413.3 million revenues on last look.
On a static snapshot of this morning’s options prices, it looks like options traders are not looking for more than a 2% price change in either direction. While chip stocks have been busy putting in recent highs, Novellus hasn’t really participated in the share gains. Unfortunately, this stock has seen its fair share of downgrades this year and the average price target from analysts is under $30.00 as the analysts prefer other chip equipment plays out there. If the company makes the $1.64 EPS estimate for 2007, it trades at 17.7 times 2007 earnings.
At the end of June, Novellus said results would come in at the lower-end of the guidance ranges previously offered. The company also announced it would cut executive pay and see some temporary shutdowns in the third and fourth quarters to cut down on operating expenses. Even with the recent interest in chip stocks, it feels like the Bulls’ only hope for today is news that could be deemed "less-bad" than just a couple weeks ago.
Novellus’ market cap is under $4 Billion at current prices and the stock is no longer viewed as a sector-leader. Its 52-week trading range is $22.55 to $35.00 and shares are down more than 10% in the last 90-days.
Jon C. Ogg
July 16, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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