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Prudential Cuts Novellus Price Target, Maintains Rating

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Prudential Securities lowered its 12-month price target for Novellus Systems (NVLS) to $55 from $85, citing expected slower growth in 2001.

The company's shares were recently trading down 13.1%, or $4.31, to $28.50 on the


. Prudential said it expects Novellus to lower its 2001 growth target to a range of 25% to 35%, given the likelihood of "flat-to-up orders." It also said 15% to 16% sequential order growth for the company "is unlikely," given "current capacity push-out of orders by DRAM manufacturers and slower ramp in Taiwan."

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Novellus, a semiconductor equipment maker, had previously guided revenue growth of about 45% or more in 2001. According to

First Call/Thomson Financial

, analysts on average expect 2001 revenue of $1.89 billion.

Prudential, which maintained its strong buy rating on Novellus, also expects the company's fourth-quarter order guidance to come down during its mid-quarter update conference call scheduled for Thursday after the market closes.