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Investing.com - Evercore ISI raised its price target on Applied Materials (NASDAQ:AMAT) to $290.00 from $208.00 on Friday, while maintaining an Outperform rating on the semiconductor equipment manufacturer. The new target represents significant upside from AMAT’s current price of $223.23, with the stock already delivering a 38.37% return year-to-date.
The firm cited Applied Materials’ approximately 25% exposure to the DRAM market, positioning it as one of the best semiconductor equipment stocks to benefit from re-acceleration in memory and HBM (High Bandwidth Memory) spending. InvestingPro data shows AMAT has already seen a strong 28.92% price return over the last six months, with analysts expecting the company to remain profitable with forecasted EPS of $9.49 for fiscal year 2025.
Evercore ISI noted that Applied Materials’ early October announcements, which lowered revenue expectations due to new Bureau of Industry and Security (BIS) restrictions on China and announced severance charges associated with a reduction in force (RIF), have effectively de-risked expectations.
The research firm highlighted that Applied Materials currently trades at 24x next-twelve-months earnings per share, the lowest price-to-earnings ratio in Evercore’s semiconductor equipment coverage and a 23% discount to large-cap peers Lam Research and KLA Corporation. According to InvestingPro data, AMAT’s current P/E ratio stands at 26.37, with the company maintaining a solid financial health score rated as "GOOD" by InvestingPro’s comprehensive evaluation system.
Evercore ISI believes expectations for Applied Materials are low, estimates are de-risked, and the company is positioned to deliver upside surprises over the next 6-12 months from higher memory capital expenditure, resulting in what the firm describes as a positive risk/reward ratio. Based on InvestingPro’s Fair Value assessment, AMAT appears slightly undervalued at current levels, with the stock showing higher volatility (Beta of 1.67) but strong historical returns. For deeper insights, check out the comprehensive Pro Research Report available for AMAT among 1,400+ US equities on InvestingPro.
In other recent news, Applied Materials Inc. reported financial results for the fourth quarter of fiscal 2025, surpassing analysts’ expectations in both earnings and revenue. The company posted an earnings per share of $2.17, exceeding the forecasted $2.11, marking a 2.84% earnings surprise. Revenue for the quarter reached $6.8 billion, slightly above the anticipated $6.68 billion. Despite these positive results, the company’s stock experienced a decline in aftermarket trading. Additionally, there have been no recent reports of mergers or acquisitions involving Applied Materials. Analyst firms have not recently upgraded or downgraded the stock. These developments come amidst a backdrop of fluctuating market conditions. Investors may find these results significant as they consider their investment strategies.
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