UPDATE: Nomura Initiates Coverage on KLA-Tencor Corporation with Neutral Rating, $75 PT on Market Leader Position

In a report published Thursday, Nomura analyst Romit Shah initiated coverage on

with a Neutral rating and $75.00 price target. In the report, Nomura noted, “We believe that KLA-Tencor is the strongest company in the semi equipment sector and that it should continue to benefit in the near term as customers ramp their processes (3D/20nm) to production and improve yields. However, we believe that the company is less levered to the upcoming tech transitions and that it has fewer levers to improve profitability. Moreover, the increasing scale of Applied Materials could pose a risk to KLAC's high market share in process control. Our TP of $75 is based on 13x CY15E EPS, plus $13 per share in net cash.” KLA-Tencor Corporation closed on Wednesday at $68.60.