Canaccord Genuity downgraded Veeco Instruments (VECO) earlier today from Buy to Hold and slashed the price target from $58 to $39.  Hat tip to Street Insider for the analyst comment.

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“We are downgrading VECO shares as we project a cyclical digestion period and pause in earnings power in the coming years following the current capacity build-out for LCD TV backlighting…We are modeling 347 MOCVD shipments in 2011, going down to 130 in 2012. As such our revenues go from $1,047.4M in 2011 to $602.1M in 2012 with EPS of $3.87 to $1.30, respectively.”

Shares of VECO were down nearly 7% on the day with heavy volume.  While the stock maintains support of the 200 day moving average, selling volume has been unusually heavy in recent days and it’s likely that support level won’t hold.