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Traders at Palma are Bullish on TER

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Teradyne (TER) this morning sharply raised its outlook for its fiscal third quarter ending October 4.

The semiconductor test equipment company said it now sees revenue of $250 million to $260 million, up 50% sequentially, and above previous guidance of $190 million to $205 million. The company now sees non-GAAP EPS of 10-13 cents; previous guidance had been for a range of a loss of 2 cents and a profit of 2 cents.

The Street consensus for the quarter has been $201.5 million in revenue and profits of a penny a share.

Teradyne (TER) shares traded sharply higher today after Oppenheimer analyst Gary Hsueh boosted his rating on the semiconductor test equipment provider to Outperform from Perform. He set a price target of $13, well above yesterday’s close at $8.27.

Teradyne (TER) is the world's leading supplier of automatic test equipment used by the semiconductor and telecommunications industries. This Massachusetts based company is positioned at a key juncture of the ongoing electronics revolution, including wireless devices of all kinds. Teradyne will declare earnings on July 29th. The consensus earnings are $-0.24, with a high and low of $-0.21 and $-0.28, respectively. We believe that the current price of $8 and market capitalization of under $1.4 billion represents an attractive entry point for investors. Here's why:

Strength in the NAND flash memory chip market, and from Apple’s (AAPL) iPhone in particular, should help SanDisk (SNDK) beat expectations when it reports Q2 earnings when it reports tomorrow, according to a note today from Stifel Nicolaus analyst Patrick Ho.

Ho doesn’t formally cover SanDisk: he’s more interested in the implications for some of his coverage companies, including Teradyne (TER) and Verigy (VRGY), both of which he rates “Buy.” Those two companies make chip test equipment.