Needham & Company Downgrades Photronics (PLAB) to Hold, Model Reset Following Warning

Needham & Company downgraded Photronics (NASDAQ: PLAB) from Buy to Hold on model reset following warning.

Analyst Y. Edwin Mok commented, "We are downgrading PLAB from Buy to Hold after the company lowered guidance for the October quarter. PLAB is facing near-term pressure on multiple fronts in both high-end and mainstream businesses that could further decline in the January quarter. In semi, we believe the transition at Micron [UP] appears to be more challenging than previously anticipated, while limited volume of leading-edge logic production should constrain revenue contribution in the coming year. In display, while the adoption of AMOLED should offer great longer-term opportunities, we see several quarters of lumpy transition limiting rebound of this business. Overall, we are materially lowering earnings in the next few quarters, and see limited upside to the stock even after the sharp pull-back in after-hour trading."

Lowering FY16E NG EPS to $0.44 and FY17E to $0.20. Introduce FY18E rev/EPS at $490MM/$0.45.

For an analyst ratings summary and ratings history on Photronics click here. For more ratings news on Photronics click here.

Shares of Photronics closed at $10.75 yesterday.

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