UPDATE: Pacific Crest Downgrades KLA-Tencor

On Tuesday, Pacific Crest downgraded shares of

from Outperform to Sector Perform as the stock flirts with the previous $72 price target. Analyst Weston Twigg believes “28 nm capacity may grow meaningfully while upcoming nodes become smaller...a more negative event for KLA-Tencor than others,” as mature nodes are less process control intensive. Twigg also is concerned that if “Samsung and GLOBALFOUNDRIES fail to win Apple, QUALCOMM or any other meaningful customer at the 14 nm FinFET node, those two companies may not add meaningful foundry capacity beyond 28 nm, which could drive disappointment in foundry demand next year, potentially impacting KLA-Tencor on a relative basis more than peers.” KLA-Tencor's outperformance could continue “if foundry demand picks up meaningfully,” according to the analyst. Shares are down 1.2 percent to $67.99 following the downgrade.