Noble Financial Upgrades Veeco Instruments, Cites 'Swelling' Backlog

In a report published Wednesday, Noble Financial Capital Markets analyst Mark Miller upgraded shares of

to Buy from Hold with a $42 price target following the company's fourth-quarter results on Tuesday. Veeco earned $0.13 during its fourth quarter, better than the $0.04 per share analysts were expecting. Revenue of $113.6 million was also higher than the $108.32 million analysts were expecting. In his note, Miller wrote that the company's fourth-quarter print "exceeded investor expectations" as orders rose to the highest level since 2011. The analyst added that the company saw $196 million of orders, including a $142 million order in MOCVD tools and $45 million in data storage. The analyst further noted that the orders corresponded to a book-to-bill of 1.73 and resulted in a year ending backlog of $287 million, which included $200 million in MOCVD tools. "With a backlog entering 2015 of $287 million and expected first half 2015 orders around $225 million, in conjunction with expected PSP sales of $65 million, we see 38 percent top line growth in 2015 and sequentially improving margins nearing 40 percent by the end of the y ear, resulting in sequential bottom line growth after the first quarter," Miller wrote.