Applied Materials (AMAT): Confident in Long-Term Growth, Raising Ests and PT - Needham
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Needham & Company analyst, Edwin Mok, reiterated his Buy rating on shares of Applied Materials (NASDAQ: AMAT) and raised his price target to $36.00 after investor's initial reactions to AMAT's F4Q16 (Oct) results that came with declining bookings and limited growth in F1Q.
The analyst believes this reaction could be fear of a quarterly peak but guidance for DD% rebound in JanQ bookings and the upbeat outlook of sustainable growth in 2017 should address those concerns.
The analyst stated "we believe AMAT's strong performance in 2016 demonstrates that management's strategy of targeting differentiated products around industry inflections is bearing fruit. With its product pipeline continuing to expand, share gains in multiple areas, and reduced cyclicality in both the Semi and Display industries, we expect AMAT to see multiple years of profitable growth ahead".
The new PT of $36 is up from $34 based on a 15x P/E multiple on higher estimates.
Shares of Applied Materials closed at $30.73 yesterday.
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