Applied Materials (AMAT): New Guidance Is Still Too Conservative - Nomura

Nomura Securities analyst, Romit Shah, reiterated his Buy rating on shares of Applied Materials (NASDAQ: AMAT) after the company published a new financial model that showed a path to $2.80 and $3.17 of EPS in 2019 on WFE spending of $34.5b and $37b. The new model shows significant upside from the company’s previous estimate of $2.00 in FY 2018, but the analyst management is still being conservative with its outlook.

Applied expects to grow from a FY 2016 EPS of $1.75 to $2.80 based on revenue increasing from $10.8b in 2016 to $13.5b in 2019 (+$0.98), gross margin from 43.3% to 44.6%, operating expenses from $2.4b to $2.6b, taxes drop to 11% and a the company executes a $2b buyback.

No change to the price target of $31.

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

Shares of Applied Materials closed at $30.57 yesterday.

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