CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We raise our price target by $36 to $777, 25x our CY 24 EPS view of $31.07, a premium to Lam’s 3-year historical average (~19x) and above our previous multiple (24x) on LRCX’s rising exposure to key technology inflections and increasing confidence that the memory market is entering an upcycle. We raise our FY 24 (Jun.) EPS view to $29.33 from $28.73 and lower FY 25’s to $35.08 from $35.43. Memory grew to 48% of Dec-Q sales (vs. 38% in Sep-Q), driven by growth in DRAM (31% vs. 23%), largely a result of continuing demand for high-bandwidth memory to support AI applications. We see this continuing in CY 24 and expect memory will account for a larger proportion of sales, supported by stable shipments into China. We expect sales will grow a bit faster than LRCX’s updated WFE growth forecast for CY 24 (~6%). We like LRCX’s fundamentals and growth prospects, but we see the stock as pricey at current levels (~27x forward P/E) and think further multiple expansion requires higher growth forecasts in the coming quarters.