Cowen Lifts PT on Lam Research (LRCX) to $105 Following Analyst Day
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Cowen boosts its price target on Outperform-rated Lam Research (Nasdaq: LRCX) from $100 to $105 following today's analyst meeting.
The firm noted:
- Like the steel companies during the industrial revolution, LRCX continues to fundamentally benefit from the shift to vertical transistor architectures. To that end, LRCX again increased its served market target due (again) to 3D NAND where timelines and technology cadence continue to pull in. End market-wise, advanced computation and mass storage are driving the next wave of innovation and LRCX is driving the single largest wave in the entire semiconductor industry – 3D NAND.
- While LRCX is highly exposed to 3D, it also highlighted its balance with foundry/logic patterning exposure and a rapidly growing installed base to feed its service business. To that end, LRCX laid out long-term growth drivers in which mobile and data center are sustaining ~25% DRAM bit growth and ~50% NAND bit growth. While conversion capex is lower than greenfield, LRCX went out of its way to indicate that its revenue opportunity is the same for either case.
- Additionally, IoT is driving another 300k wsm of 28nm demand through C2020 – a surprisingly large number to us, one that should feed service across the entire industry. Lastly, on China, LRCX sees continued growth in C2017 and a major inflection in China WFE beyond 2017 with WFE nearly doubling from C2016-2019, led largely by indigenous China projects, a good portion of which LRCX is suggesting will be leading edge (likely memory, though IP access remains a major question to us).
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