Shares of KLA-Tencor Corp. KLAC, +1.55% are down 1.2% in premarket trading Monday after Evercore ISI analyst C.J. Muse downgraded the stock to in-line from outperform. He had upgraded the stock to outperform last month, but he now argues that KLA-Tencor will have the “largest peak-to-trough decline of the front-end equipment suppliers.” Muse now expects that the March quarter will be the trough for equipment sales, given that his latest round of channel checks showed “an even more meaningful cut to KLAC’s build than originally anticipated due to continuing memory weakness.” Muse cut his price target to $100 from $140. His downgrade comes one day before fellow chip-equipment company Lam Research Corp. LRCX, +4.35% reports September-quarter earnings. Muse has an outperform rating on Lam shares. KLA-Tencor’s stock has fallen 12% over the past 12 months, while the S&P 500 SPX, +1.42% has gained 8.4%.
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