UBS Raises Price Target on Lam Research (LRCX) to $116
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UBS reiterated a Buy rating on Lam Research (NASDAQ: LRCX), and raised the price target to $116.00 (from $112.00), following the company's analyst day. Lam's new targeted served addressable market by FY19 is 37%, up from 34% this year as it has new growth from patterning. The company kept its Dec-16 quarterly guidance unchanged (shipments at $1.85B) but guided its Mar-17 shipments significantly higher by 24% q/q to $2.3B (consensus was at $1.8B) with upside from all customer types.
Analyst Stephen Chin commented, "We keep a Buy rating as Lam shared solid long term targets for EPS, capital returns and semis industry trends that keep us confident in its solid quarterly execution. We still believe the upside case is also driven by how many new customers emerge from China that will buy more semicap equipment for both mainstream and leading edge technology. We are tracking 5 indigenous China semis customers closely and agree with Lam's view that the WFE spend in China can double from FY16 to FY19 and drive more upside. We believe there are still investor concerns about Lam's sales being 1H17 weighted (still early), not outgrowing WFE this year (we think it is just timing) and possibly lower annual growth rates in NAND capex going forward ($50B total over the next 5 years)."
Shares of Lam Research closed at $104.71 yesterday.
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