Cowen Boosts PT on Applied Materials (AMAT) to $33 Following Q4 Report, Outlook

November 18, 2016 6:12 AM EST
Get Alerts AMAT Hot Sheet
Price: $32.71 --0%

Rating Summary:
    25 Buy, 3 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 1 | Down: 4 | New: 1
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Cowen and Company lifts its price target on Outperform-rated Applied Materials (Nasdaq: AMAT) from $32.50 to $33 following Q4 results released Thursday night.

The firm commented today: While orders for both display and SSG were down as expected, the outlook here is very strong and AMAT is executing very well. Recent pull-ins that have made CQ4 better across the board are having no impact on C2017 with AMAT expressing even more confidence in a strong WFE year (potentially as high as $35B) where it again gains share (we estimate it gained an amazing ~300bps share in C2016). This is really before a host of huge China projects start to really take off (more '18). We have long argued that higher capital intensity has put a higher "floor" into WFE with investment now much more about technology than capacity. While we do see WFE "run-rate" exiting the year a good bit above the $35B level and shipments have probably reached a near-term peak, shipments are also unlikely come off much given another strong 3D NAND year and the 7nm foundry/logic wave just starting to build. Lastly, there are a number of new silicon-hungry applications requiring dramatically more compute complexity (AR/VR, AI and autonomous vehicles) and this should absolutely benefit AMAT. Ultimately, more sustainable performance argues for a better multiple – something that has yet to materialize vs. semis peers whose models are largely tapped out in terms of elements of surprise.

For an analyst ratings summary and ratings history on Applied Materials click here. For more ratings news on Applied Materials click here.



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