Piper Jaffray Remains Bullish on Applied Materials (AMAT) Following Analyst Day

Piper Jaffray reiterates an Overweight rating and $25.00 price target on Applied Materials (NASDAQ: AMAT) following an analyst day. Analyst Ruben Roy says that AMAT outlined a FY18 target model which forecasts 21.9% of WFE share leading to $2.00 in EPS.

Roy commented, "We reiterate our OW rating on AMAT following the company's analyst day. AMAT is building its SSG (Silicon Systems Group) business with new technologies that it expects to take market share in etch while expanding its deposition presence via a new ALD tool. The company is de-emphasizing WFE growth as part of its growth, but instead is targeting share growth as advanced semi nodes for 3D NAND and FinFet technologies require greater precision for deposition and etch. AMAT outlined a FY18 target model which forecasts 21.9% of WFE share (19.3% share currently according to Gartner in 2014) leading to $2.00 in EPS, ($1.19 annualized currently). We believe the greatest risk to this could comes from increased mix of etch which carries lower margins below FY18 target of 44.6%. But AMAT's new products are gaining strong traction and continued growth in services and display leaves us optimistic FY18 targets are achievable."

For an analyst ratings summary and ratings history on Applied Materials click here. For more ratings news on Applied Materials click here.

Shares of Applied Materials closed at $19.31 yesterday.

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