As reported earlier, DA Davidson analyst Thomas Diffely downgraded Nanometrics (NANO) to Neutral and kept his $44 price target, saying that after outperforming its peer group over the past few years, the stock now trades at a 40% premium to its peers. The analyst notes that the outperformance was warranted based on the company's strong leverage of its NAND producers, wins in the DRAM market, and exposure to emerging memory customers in China, with the company registering its 4th consecutive year of double digit growth in 2017. Despite this positive backdrop, Diffely believes that Nanometrics stock appreciation "recently outpaced fundamentals" and recommends that investors consider MKS Instruments (MKSI) and Rudolph Technologies (RTEC) for their "equally strong" growth drivers.