CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lift our price target by $23 to $778, 25x our CY 2025 EPS view ($31.13), near peers and above KLAC’s three-year average (~18x) on growing confidence that the semi industry is exiting a downcycle, driven by AI. KLAC posted Mar-Q sales of $2.36B (-3% Y/Y) and EPS of $5.26 (-4%), above consensus, including a -$0.40 impact to EPS from its March decision to exit the flat panel business. We raise our FY 2024 (Jun.) EPS view by $0.06 to $23.36, lift FY 2025’s by $1.27 to $28.56, and raise FY 2026’s by $0.70 to $33.40. We expect CY 2024 growth to be led by foundry/logic activity (64% of Mar-Q process control sales) as customers move at a faster pace toward gate-all-around and 2-nm, while advanced DRAM continues growing to enable high-bandwidth memory (HBM), despite a flattish forecast for China customers (42% of Mar-Q sales). We are encouraged by the success of KLAC’s back-end semi process solutions, as its advanced packaging business is expected to grow sales ~30% in 2024 (to $400M) on similar HBM/AI drivers.