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 12-month target by $13 to $741 based on a P/E of 24x our CY 24 EPS view of $30.87. Our multiple is near semi equipment peers, but a premium to LRCX’s three-year historical average (19x), justified, in our view, by its increasing exposure to high-growth markets like high-bandwidth memory, advanced packaging, and backside power delivery. We increase our FY 24 (Jun.) EPS estimate by $1.79 to $28.73 and our FY 25 estimate by $0.22 to $35.43, with near-term strength driven by trailing-edge sales into China. Chinese customers accounted for 48% of revenue during the Sep-Q, a significant increase from 26% during the Jul-Q. We are skeptical if this pace of growth is sustainable in the long term, but we think China demand remains elevated given secular tailwinds like electrification. We believe memory (38% of Sep-Q revenue) is likely to start improving in the next few quarters, providing upside for LRCX, with management highlighting a stabilizing NAND market and spending modestly up from DRAM customers.