Lam Research (LRCX) PT Raised to $1,050 at Stifel

Stifel analyst Brian Chin raised the price target on Lam Research (NASDAQ: LRCX) to $1,050.00 (from $950.00) while maintaining a Buy rating.

The analyst commented, "If last year was a discussion around inflection, this year the discussion should be around magnitude of recovery. We remain upbeat on the initial areas of pickup – HBM and advanced packaging – and expect to see incremental evidence of this broadening. In the short-term, we expect less immediate impact to our estimates and continue to model 2Q flat +/- off a downward-biased 1Q. China spending is the main concern, yet we continue to hear of new project activity despite fears it will subside. Moreover, with utilization in advanced foundry/DRAM nodes tight/tightening, we expected upward pressure on initial 2024 capex forecasts, and believe this sets the stage for orders picking up in 2H24 and perhaps even upside to our +15% CY25 WFE growth forecast. We raise PTs for several names, with our inclination being to discount deeper into the upcycle, valuing semicap companies based on higher peakexpected-earnings-power in a growth se-cyclical sector."

"We have long viewed Lam Research as one of the stronger technology and better executing companies in semis/semi equipment. After a CY23 underperforming WFE, Lam is poised for the reverse to occur this year (memory WFE is poised to rebound, even outgrow in CY24 helped by easier compares but also growth in High Bandwidth Memory and pent-up technology roadmap spending). With improved checks Earnings Preview April 15, 2024 4 on near-term spending off a hard bottom, and with a legitimate catalyst to build around in emerging AI-driven HBM, we upgraded our rating to Buy in July '23."

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