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Summit Research Cuts Veeco Instruments Price Target As Company Continues To Underperform

Luke Jacobi

Veeco Instruments (NASDAQ: VECO) shares may be under pressure after Summit Research cut its price target from $30 to $25. Summit currently has a Sell rating on the stock.

With shares currently trading at 41 times forward earnings, Summit questions "whether even 16x would be appropriate as the company continues to be unprofitable and does not grow faster than S&P500."

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Analyst Srini Sundararajan called due diligence for the acquisition of Synos ‘amateurish.’

"We continue to hold the opinion that Synos continues to be a purchase with no consequences – neither for VECO in terms of revenues, nor for the decision to buy it."

Regarding what appears to be a high level of utilization, this is compares to a low 2013 figure. Further, Summit argues these orders may be spares or upgrades, thus cannibalizing new tool purchases.

Shares of Veeco are unchanged in Wednesday’s premarket. The stock was last trading at $36.69.

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