Veeco shares slide after Goldman downgrades

Goldman downgrades Veeco, saying investors too optimistic about volume rebound; shares drop

Associated Press

Veeco Instruments Inc. shares plunged in trading Monday after a Goldman Sachs analyst downgraded his rating on the company, which makes equipment for industries including solar, lighting and data storage, saying that investors may be too optimistic about its growth next year.

THE SPARK: Analyst Brian Lee lowered his rating on the company's shares to "Sell" from "Neutral" and cut his price target on the shares by $3 to $27.

THE ANALYSIS: Investors had driven the company's shares up 68 percent in 2012 through Friday because they expected Veeco's volumes to rebound, Lee said. But he predicted that volumes in 2013 won't change much from 2012, as demand remains weak in Korea and China. He cut his earnings estimates for the company through 2014.

— For 2012, Lee cut his earnings estimate to $1.50 per share from $1.55. Analysts polled by FactSet, on average, are expecting $1.48 per share.

— For 2013, to $1.65 per share from $2. Analysts are expecting $1.96.

— For 2014, to $2.10 per share from $2.80. Analysts are expecting $2.99.

SHARE ACTION: The stock dropped $3.79, or 11 percent, to $31.17 in afternoon trading. Shares hit a 52-week high of $38.39 on Sept. 14.

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