CFRA Maintains Buy Rating On Shares Of Applied Materials, Inc.

We raise our price target by $7 to $240, 25x our CY 25 EPS view ($9.61), near peers and above AMAT’s 3-year average (~16x) on rising AI momentum and improving conditions across multiple end markets. We raise our FY 24 (Oct.) EPS view by $0.07 to $8.45, raise FY 25’s by $0.19 to $9.41, and initiate a FY 26 view at $10.58. AMAT posts Apr-Q sales of $6.65B (flat Y/Y) and EPS of $2.09 (+5%), near consensus, while raising its ’24 advanced packaging sales projection by $0.2B to $1.7B on stronger HBM packaging growth and providing a bullish forecast for GAA-related equipment sales (~$2.5B of incremental sales expected in CY 25) as customers ramp 2-nm node activity. We see tailwinds from rising AI demand fueling further growth across both logic and memory, and we are encouraged by positive commentary on ICAPS strength considering global weakness in the auto / industrial markets, largely a result of AMAT’s China exposure (43% of Apr-Q sales), which is set to decline to ~30% of sales by YE 24 on lower DRAM shipments.

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