FEI Gains As Analyst Sees Benefit From Stimulus

NEW YORK (AP) — The $787 million economic stimulus package should boost demand for FEI Co.'s electron-scanning microscopes and other nanotechnology equipment, an analyst said, as he upgraded the company's stock.

Credit Suisse analyst Satya Kumar raised his rating on the Hillsboro, Ore.-based company to "Outperform" from "Neutral" due to the strong bookings expected from the science and research funding outlined in the stimulus and because of the recent decline in FEI's stock price.

FEI shares, which had traded as high as $29.14 in the past 52 weeks, had lost 54 percent of their value as of Thursday's close.

Spending on nanotech products has averaged about $1.8 billion to $1.9 billion for the past three years, with FEI sales making up about 7 percent of that market, Kumar said. The stimulus package has around $14.9 billion worth of funding for U.S. research institutes, which are FEI's customers, and the company should be able to draw in about $54 million in additional sales in 2010, he said.

Kumar also said that a weakening euro has helped the company's profit margin, with every cent the 16-nation currency drops against the dollar a boon of about $175,000 in operating profit. FEI's guidance called for a euro value of $1.35; it currently trades at $1.29.

Shares of FEI gained 11.5 percent, or $1.55, to $15.07 in midday trading Friday. Credit Suisse has a 12-month target price of $18 on the stock.