A pair of semiconductor equipment makers,
, were moving higher Friday morning on positive Wall Street research.
Both stocks were upgraded and had their price-targets raised at Jeffries, which argued that in an uncertain chip cycle, it pays to own the sector's safest names. Applied Materials was raised to hold from underperform and its price target raised to $15 from $14.25, slightly below the stock's current level. KLA-Tencor was raised to buy from hold and its target raised to $42 to $40.
Jeffries cited a slowdown in equipment demand, a trend that was highlighted Thursday night when
said revenue and orders
would be at the low end of forecasts in the third quarter.
"With shipment push-outs and customer caution now in the public domain, we believe that it is too late to sell into the much-anticipated directional change in fundamentals," Jefferies wrote. The company cited historical evidence that suggest both companies react well after excess inventory is swept out of the industry channel.
In early trading, Applied Materials was up 16 cents, or 1%, to $16.14, while KLA-Tencor rose 68 cents, to 1.6%, to $38.18.