From Notable Calls:
UBS is making a big call on Veeco Instruments (NASDAQ:VECO):
Our discussions with industry contacts in China found that Elec-Tech plans to sign a large purchase order for 100 of Veeco’s MOCVD reactors in 3Q10 with 70 for its Wuhu, China factory and 30 for its Yangzhou, China factory. In addition, we found Elec-Tech plans to order 30 of Aixtron’s MOCVD reactors for its Wuhu factory.
Estimate potential 2011 EPS upside for Veeco & Aixtron at $0.94 & €0.13
Our checks find Elec-Tech is close to signing its 100 MOCVD order with Veeco for $255M, which is $2.6M per MOCVD reactor, while Aixtron’s 30 MOCVD order is for $83M, or $2.8M per MOCVD, reactor (likely the new G5 tool). If Veeco is able to close on this order, we estimate it could add $0.90 to our current 2011 EPS estimate of $4.20, while the Aixtron transaction could add €0.13 to its EPS in 2011E....MORE
Notablecalls: Note that UBS highlighted 2 Chinese orders back in June & their sales is out with a call that with this 100 MOCVD order included, Veeco's 2011 EPS could reach around $6.00 (consensus is still around $4.00).
This means the stock could effectively DOUBLE from here.
I would not be surprised to see VECO trade up 2-3 pts on this today.
PS: VECO went up 8-9% intraday in June when UBS highlighted the Sanan & NeoNeon orders.
Definitely worth watching. Again, great job UBS Semi team. Chin, Jenkins & Mulholland hitting it out of the park.
Recent shorts are going to get some ol' fashioned belt-in-the-teeth action. 25% short interest in the name.