Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

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Equity Bottom-Up

Tokyo Electron Ltd. reported fiscal third-quarter results that were consistent with our expectations. Similar to major competitors such as Applied Materials and Lam Research, the firm has benefited from greater demand for both etch and deposition tools. Management projected wafer fabrication equipment, or WFE, spending to be up at least 10% for 2017 due to continued 3D NAND and advanced logic/foundry investments. While we agree WFE will be directionally higher for the year, we think spending will be weighted to the first half based on the expected timing of customer ramp schedules.We are modestly raising our fair value estimate to JPY 8,500 from JPY 8,000 per share, as we revise our internal WFE projections slightly upward. However, we view shares of narrow-moat Tokyo Electron as overvalued and believe we are at or near a cyclical peak in WFE.Analyst: Abhinav Davuluri

Tokyo Electron Ltd. reported fiscal third-quarter results that were consistent with our expectations. Similar to major competitors such as Applied Materials and Lam Research, the firm has benefited from greater demand for both etch and deposition tools. Management projected wafer fabrication equipment, or WFE, spending to be up at least 10% for 2017 due to continued 3D NAND and advanced logic/foundry investments. While we agree WFE will be directionally higher for the year, we think spending will be weighted to the first half based on the expected timing of customer ramp schedules.We are modestly raising our fair value estimate to JPY 8,500 from JPY 8,000 per share, as we revise our internal WFE projections slightly upward. However, we view shares of narrow-moat Tokyo Electron as overvalued and believe we are at or near a cyclical peak in WFE.Analyst: Abhinav Davuluri

Tokyo Electron Reaches Record Equipment Order Level; Shares Remain Overvalued