Applied Materials (AMAT) PT Lowered to $180 at Stifel

Stifel analyst Brian Chin lowered the price target on Applied Materials (NASDAQ: AMAT) to $180.00 (from $195.00) while maintaining a Buy rating.

The analyst comments "Applied Materials F3Q(Jul) revenue/EPS exceeded estimates. However, the outlook for F4Q(Oct) was weaker than expected, with revenue guided down high-single digits QQ versus our flattish forecast. This reflects digestion in China (guided -20% QQ, after +44% QQ in F3Q) and lower leading-edge foundry/logic (susceptible to lumpiness, given customer concentration), partially offset by higher ICAPS (ex-China). We expected leading-edge momentum to slow, albeit less abruptly, and for China shipments to not be so F3Q-weighted. We think Applied’s later July-ending quarter (+1mth offset) helps explain why China was up more-than-peers, whilst peers guided China better in calendar 3Q. We lower our estimates and price target yet maintain our Buy-rating, given our continued view that Applied should capture above-average share of leading-edge foundry/logic and DRAM/ HBM investment. While there is a disparity in relative growth rates this year, this explains the discount in Applied’s relative multiple, which relative to peers is retesting historical lows."

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