UPDATE: Bernstein Starts Lam Research (LRCX) at Outperform
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(Updated - March 30, 2021 4:46 PM EDT)
Bernstein analyst Stacy Rasgon initiates coverage on Lam Research (NASDAQ: LRCX) with a Outperform rating and a price target of $700.00.
Over the longer term, they believe semiconductor capital equipment is likely to be extremely structurally advantaged.
"Our view on WFE growth over the next several years is very positive; we see 2021 WFE spending at ~$75B, up ~19% YoY, and growing further through 2023 with foundry/logic spending set to inflect materially and go structurally higher, industry supply constraints complementing strong demand, memory spending recovery a matter of when vs if, and increasing potential for governmental incentives, supporting the stocks even after the run," Rasgon commented.
While a structurally positive WFE view is by itself likely enough to like the stocks, they believe both LRCX and AMAT have a number of attractive additional components to create value and support multiples, "including a burgeoning services story, increasing SAM opportunities, solid (and potentially underappreciated) capital return, analyst day catalysts (AMAT holds their meeting on April 6, and LRCX's recent long-term analyst day model suggests a good amount of upside from here), and multiples that still appear attractive compared to the overall semi sector especially taking into account the industry's structural improvements."
Shares of Lam Research closed at $570.29 yesterday.
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