This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Applied Materials' Slide Brings Out Buyers

Updated from 9:50 a.m. EST

Shares of Applied Materials (AMAT) fell Thursday after the company forecast a painful 35% decline in first-quarter orders. However, analysts were split on whether the shares were getting cheap enough to buy.

The stock was recently faring better and was down 36 cents, or 2.1%, to $16.98, after earlier approaching its 52-week low of $15.34. First Albany lowered the stock to neutral from buy, while Needham and J.P. Morgan opined that the worst of the company's news is probably out.

At First Albany, Auguste Richard said he thinks the shares "will trade sideways until bookings momentum returns."

He added that the quality of fourth-quarter earnings was weak. Applied had guided EPS to 24 cents to 26 cents, but after stripping out a lower-than-expected tax rate, earnings would have been 23 cents -- a penny below the company's guidance. His firm hasn't done banking for Applied.

In the opposite camp, Needham's Robert Maire wrote, "While the knee-jerk reaction is likely to be very negative, we would not be surprised to see some upgrades from other analysts calling for an early bottom. This is true in that the stocks tend to bottom a quarter or two before reality bottoms in this group." Recently, he pointed out, fellow equipment maker Teradyne (TER) reported a similarly disastrous outlook but saw its stock price gain on the news.

To be sure, Applied's order guidance for a slide of 35% was a "shock" to investors who had expected a decline on the order of 15% to 20%. But if orders bottom out as predicted, implying a quarterly bookings level of $1.7 billion, the situation would still be much better than the previous cycle in which Applied's orders bottomed out at $1 billion and the company saw a loss, he said.

"The most downside we can see is likely to be a retreat away from the gains seen in the recent days, if there is any retreat at all," concluded Maire, who maintained his buy rating on the stock. His firm hasn't done recent banking for Applied.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs