Photronics Shrs Rise As UBS Upgrades To Buy

Photronics (PLAB) shares are trading higher this morning after UBS analyst Stephen Chin raised his rating on the photomask company to Buy from Neutral. His price target is now $6, up from $2.50. The stock closed yesterday at $4.09. He also boosted his EPS estimate for the October 2009 fiscal year to a loss of 66 cents from a loss of 73 cents; for FY 2010 he now sees a profit of 11 cents, up from 7 cents, and well ahead of the Street at 2 cents.

Chin sees upside from the company’s display sector, with customer LG Display (LPL) announcing it has increased capacity in Gen-8 glass six months ahead of schedule due to strong demand from China. Chin asserts that the company is likely to confirm a photomask win at LPL on the the July quarter conference call.

While conceding that demand for photomasks from the chip sector is still week, Chin notes that semi factory utilization rates should improve to around 80% by year end, up from 57% in Q1, a level which he contends is “typically a leading indicator for improved semiconductor photomask sales.”

PLAB today is up 15 cetns, or 3.7%, to $4.24; earlier int he session the stock traded as high as $4.63.