Boosting price target on AMAT amid confirming industry data
Tuesday night, semiconductor capital equipment company Lam Research (LRC) and competitor to Disruptive Technology investment theme position Applied Materials (AMAT) on the Tematica Select List reported quarterly earnings that topped expectations and guided the current quarter above expectations. We found the company’s color commentary on the industry as very supportive of the bullish semi-cap demand thesis behind our position in AMAT. In our view, the stand out item from Lam was it’s initial 2018 forecast calling for not only another year of double-digit revenue growth, but for the first half of 2018 to strengthen vs. the back half of 2017. This also echoes the upbeat outlook shared by Applied just a few weeks back at its 2017 Analyst Day.
- On the strength of the strengthening outlook for the semi-cap business alongside a multi-year ramp at Applied’s Display business, we are boosting our long-term price target on AMAT shares to $65 from $60, which offers roughly 18% upside from current levels.
