Cowen Keeps Applied Materials (AMAT) at 'Outperform'; Comments Ahead of Q3 Print

Cowen and Company maintains Applied Materials (Nasdaq: AMAT) at Outperform with a price target of $26 heading into the company's Q3 report, which is expected out after markets close Thursday.

Analyst Timothy Arcuri commented, With merger delay now on tape and stock still acting well, we see this as a fairly uneventful print. Oct results should be largely in-line while guidance remains biased if anything to upside for Jan as SSG ships should snap back given the depths to which overall WFE sunk in CQ3 (~$27B/yr run-rate). Reit $26 target and see downside limited to $19.50-20 on $1.50 EPS even in standalone case for '15.

Key issues for the call:

1. Merger update, particularly any new detail in light of 9/22 tax law changes from Treasury;

2. More granularity on '15 WFE which AMAT has said is "up";

3. DRAM commentary given clearly more capital intensive 20nm shrinks; and

4. Any recent changes in foundry/FinFET ramp plans which, after experiencing some uncertainty in recent months, seem to be finally gaining momentum with some recent clarity from AAPL and solid initial yields at TSMC.

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

Applied Materials closed at $22.49 yesterday.

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