Wolfe Research Downgrades Lam Research (LRCX) to Peerperform

Wolfe Research analyst Chris Caso downgraded Lam Research (NASDAQ: LRCX) from Outperform to Peerperform.

The analyst comments "Downgrading LRCX to Peer Perform. We've decided to be more selective on semi-cap given the continued downward revisions for the overall WFE industry, downgrading LRCX to Peer Perform due to its greater relative exposure to NAND, where we have become incrementally bearish, and our view that street estimates for CY25 and CY26 are too high. Continued downward expectations for a NAND recovery has been the driving factor behind LRCX's underperformance over the last twelve months. Our view of the NAND market has become increasingly negative, despite it being the most depressed areas of WFE, relative to its prior peak. We outline our industry view in more detail within the note. Valuation: LRCX is currently trading at ~23x our CY25 EPS estimate, significantly higher than its etch/deposition peer AMAT, which trades at ~18x, and above LRCX's five-year average multiple of ~18x. Relative performance: LRCX has underperformed SCE peers over the last year with the stock down -1% over the last 12 months, as compared to ASML (+10%), AMAT (+15%), and KLAC (+25%). While the stock has underperformed peers however, the stock's valuation remains at a premium to peers, and since we believe LRCX's numbers have the most to reset, we expect that underperformance to continue."

For an analyst ratings summary and ratings history on Lam Research click here. For more ratings news on Lam Research click here.

Shares of Lam Research closed at $75.06 yesterday.

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