Applied Materials (AMAT) PT Lowered to $230 at Deutsche Bank

Deutsche Bank analyst Melissa Weathers lowered the price target on Applied Materials (NASDAQ: AMAT) to $230.00 (from $260.00) while maintaining a Hold rating.

The analyst comments "AMAT delivered what we view to be a fine report and guide, with little variance directionally vs. our expectations coming into earnings, and with momentum growing into 2025. Importantly, China revenues fell a substantial -24% q/q (to now 32% of revenues), with China DRAM spending expected to be at “nominal” levels going forward (healthily de-risked). Offsetting this, contributions from HBMrelated spending (both at the FEOL and in advanced packaging) are gaining steam, with company well positioned to deliver accelerated growth in 2025. Overall, we believe AMAT delivered a very solid report, albeit potentially below investors’ more bullish expectations. Following this report, our revs/GM ests rise modestly, but are offset by a higher tax rate/slightly higher opex which leaves our forward EPS ests relatively unchanged. We tweak our target P/E multiple down by ~3 turns to 24x to reflect broader multiple compression this earnings season (in-line with our target multiple reductions at AMAT peers), resulting in our PT falling to $230 (~24x our CY25E EPS). Maintain Hold rating."

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