UPDATE: Applied Materials (AMAT) PT Raised to $175 at Credit Suisse, $10 EPS is NOT the Peak

Credit Suisse analyst John Pitzer raised the price target on Applied Materials (NASDAQ: AMAT) to $175.00 (from $145.00) ahead of its 2021 Investor Meeting on April 7 which the analyst believes will be a positive catalyst for shares.

The analyst reiterated an Outperform rating, stating "Trading SemiCap has been a mistake for 5+ years. Focusing on the longer-term trends of: (1) Rising cost of capacity, (2) Growing strategic importance of domestic production and (3) Cheap valuation against superior returns has been the foundation for 8x returns in 5+ years and supports an additional AT LEAST 2x return from current levels. AMAT should outline a path to >$10 EPS, and we continue to argue multiple expansion to 25-30x – discounted back supporting our new
12-month PT to $175 from $145. Without 450 mm wafers, manufacturing complexity will continue to outgrow fab productivity; underpinning SemiCap Rev CAGR > Semi CAGR, even as the Semi CAGR inflects higher on the basis of AI and the Data Economy. While cyclicality is a risk, the secular backdrop supports higher highs and higher lows meaning >$10 LT EPS is NOT a peak but a new base off of which to drive further growth."

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