Nomura Securities Downgrades Lam Research (LRCX) to Neutral

Nomura Securities downgraded Lam Research (NASDAQ: LRCX) from Buy to Neutral with a price target of $85.00 (from $95.00) after the company extended the timeline for its merger with KLA-Tencor after a request for more info from the DOJ.

Analyst Romit Shah commented, "We have been positive on the shares of Lam Research in large part because of the acquisition of KLA-Tencor, which would broaden end market exposure and increase margins, potentially resulting in multiple expansion. However, Lam issued a press release extending the timeline for its merger with KLA-Tencor after receiving a request for more information from the Department of Justice (DOJ). Management also disclosed that they still need approval from Korea, Japan and China. We find this concerning considering management 's track record of managing quarterly earnings expectations. Risk/reward is not compelling, as such, we believe investors should move to the sidelines until there is certainty on the KLAC acquisition. FY16E EPS at $6.45; FY17E EPS at $6.80."

For an analyst ratings summary and ratings history on Lam Research click here. For more ratings news on Lam Research click here.

Shares of Lam Research closed at $89.11 yesterday.

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