Stifel Upgrades Rudolph Tech To Buy, $15 Target

Stifel issued a company note on Rudolph Technologies Inc RTEC after the recent market sell-off has made the stock an attractive valuation for analysts. Stifel upgraded Rudolph to a Buy and issued a $15 price target.

Analysts Patrick Ho and Brian Chin wrote, "On a fundamental basis, we believe Rudolph is the best positioned company to benefit from the advanced packaging (AP) trend.... We believe that this will not only benefit the company's emerging lithography business, but have a larger growth opportunity for its core macro defect inspection business...Following our recent discussion on M&A in the space, we believe Rudolph remains an attractive M&A candidate that should be combined with another comparable sized entity to create a more diversified and larger scale company."

Stifel raised four main points that could drive Rudolph's share price higher:

1. Long-Term Outlook is raised

In 2016, Stifel believes that Rudolph could benefit from back-end macro defect inspection trends and may see a recovery in foundry spending, which could provide support for the company and improve business operations.

2. Customer Adoption

Analysts believe that Rudolph has improved the ability to get repeat orders from its initial customers, which could drive customer penetration and accelerate top-line growth.

3. M&A possibility

Stifel sees Rudolph as an attractive acquisition target that can help a larger company diversify its customer base and drive scale to accelerate growth.

4. New CEO

Rudolph's new CEO Mike Plisinski has strong customer relationships which Stifel believes he can use to increase the scale of the company and improve profit margins. As COO he was instrumental in growing margins by improving operational efficiency thus Stifel sees the hire as a positive catalyst going forward.