Canaccord Upgrades Nova To Buy After Meeting With Management

In a report published Monday, Canaccord Genuity analyst Jed Dorsheimer upgraded the rating on

from Hold to Buy, while raising the price target from $13 to $17, after the recent analyst meeting. Analyst Jed Dorsheimer expects foundry spending to gain momentum, with FinFET decisions being made. "We believe the need for OCD increases at advanced nodes and NVMI is well positioned as the tool of record at TSMC and Global Foundries." "We continue to believe that the imminent logic build-out is a significant positive for Nova. We also believe the back half of 2015 will likely see added investments from the ramp of 16/14nm nodes as well as growing investments for 10nm nodes," Dorsheimer wrote. Nova recently raised its Q2 revenue and EPS guidance to $37-$39M and $0.14-$0.18 to reflect "better integration of ReVera and 10/16FinFET demand." The revenue estimates for Q2 and 2015 have been raised from $34.8M to $38.4M and from $145.2M to $151.4M, respectively, to reflect the expectation of additional foundry spend. "We see a disconnect between the company's leading position and lagging valuation," the report added.