Applied Materials (AMAT) Will be Fine on Its Own; Cowen Reiterates 'Outperform' Rating

Cowen and Company reaffirms Applied Materials, Inc. (AMAT) at Outperform with a $26 price target following news that its deal with Tokyo Electron is off.

Analyst Tim Arcuri sees Applied Materials being fine on its own. The analyst commented, We think that AMAT can generate $1.70+ in C2016 and ~$1.80+ in C2017 assuming WFE in $35 - $36 billion range as share buybacks, portfolio optimization, expense management, and new organic growth augment revenue that is on track to achieve the firm’s target model.

As WFE expands, AMAT indicated it will aggressively manage portfolio mix and we think, following the collapse of this deal, will get EXTREMELY aggressive on costs and potentially exiting several businesses to accelerate EPS leverage and drive GMs toward its 44.5% target. AMAT's CEO is one of, if not THE best at driving organic growth, and AMAT's R&D efforts should materialize on new product introductions in the coming Qs.

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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