Varian Semiconductor's (NASDAQ:VSEA) Core Semi Business Driving Growth

Varian Semiconductor (NASDAQ:VSEA) remains the top pick of Needham in their sector, driven by several catalysts, including a growing core semi business.

Needham says, "VSEA reported a solid F1Q11 (Dec) quarter and provided substantially better than expected guidance. VSEA remains our top mid/large-cap pick in the space, based on our thesis that: 1) new implant applications are driving its core semi business to outgrow WFE over the next few years; 2) VSEA is the best name levered to foundry and logic capex growth in 2011; 3) solid traction in its emerging solar business will drive upside to revenue targets; and 4) the stock warrants a premium multiple based on strong earnings growth potential...We are raising our FY11 (Sep) non-GAAP EPS estimate to $4.00 and FY12 to $4.35 on higher revenue estimates."

Needham & Company maintains a "Buy" rating on Varian Semiconductor (VSEA), which was trading at $43.53, down $0.01, or 0.02 percent, as of 2:25 PM EST. Needham raised its price target on Varian from $48 to $57.