MKS Instruments (MKSI) Q1 results and outlook for the next quarter were mixed at surface, with Q1 revenue beating Street estimates by 2% and Q2 outlook missing consensus by 3%, Deutsche Bank said Friday in a research report.

The company reported Q1 revenue of $936 million, ahead of the analysts' expectations of $915.8 million. For Q2, the company expects revenue of $925 million, plus or minus $40 million. Analysts polled by FactSet expect revenue of $937.6 million.

Deutsche Bank said the Q2 shortfall is mainly due to a change in timing of purchases of flex printed circuit board drilling equipment. The company's Q2 guidance also takes into account stalled growth in semiconductor and/or specialty industrial segments, the brokerage said.

The bank noted that the company has pointed out it has a healthier inventory in semiconductor business, which the bank believes would help in re-accelerating growth in the segment.

Deutsche Bank said it views the company's Q1 results and guidance "as significantly better than feared." However, it lowered its Street-high estimates incorporating "more conservatism on the magnitude of a rebound across businesses."

The brokerage lowered its target multiple to reflect market-wide valuation compression, resulting in a price target of $90, while maintaining a hold rating on the company.

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