UPDATE: Goldman Sachs Downgrades Veeco Instruments to Sell on Risk/Reward

Goldman Sachs reduced its rating on Veeco Instruments VECO from Neutral to Sell and lowered its price target from $27 to $30. Goldman Sachs noted, "In this note we lower our global LED MOCVD estimates by 30%-40% in 2012-2014 following recent checks that suggest a softer-than-expected outlook for LED capacity additions. In particular, utilization rates in China and Korea remain depressed, and we have cut MOCVD volumes accordingly. … In the near-term, we estimate Veeco's backlog will decline further and approach $200 mn exiting 2012. Assuming a flattish bookings profile, this implies Veeco will have roughly 30% backlog coverage relative to current 2013 consensus revenue versus an average of 50% over the past five years." Veeco Instruments closed at $34.96 on Friday.
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