SoFi CEO enters prepaid forward contract on 1.5 million shares
On Thursday, KeyBanc Capital Markets adjusted their financial outlook for Lam Research (NASDAQ:LRCX), a prominent player in the Semiconductors & Semiconductor Equipment industry, by increasing the price target on the company’s shares from $95.00 to $105.00. The firm maintained its Overweight rating on the stock, indicating confidence in the company’s performance. According to InvestingPro data, 24 analysts have recently revised their earnings upward for the upcoming period, reflecting growing optimism about the company’s prospects.
The new price target comes after Lam Research outlined a strategic and operational plan that aims to double its revenue and earnings per share (EPS) by 2028, reaching figures of $26 billion and $6.50, respectively. The company, currently generating revenue of $16.2 billion with a healthy gross profit margin of 47.7%, has demonstrated strong execution with a revenue growth of 13.2% over the last twelve months. Lam Research also provided insights into a scenario where the semiconductor industry could expand to a $1 trillion market, suggesting potential revenues over $30 billion and an EPS of $8 for the company.
KeyBanc analysts believe that Lam Research’s goals are within reach, particularly as the semiconductor industry evolves towards more complex vertical architectures. The demand for Lam Research’s specialized deposition and etch process tools is expected to grow, aligning with the company’s core competencies. This assessment supports KeyBanc’s previous upgrade of the company’s stock in January.
The company’s roadmap is built on the expectation of expanding its serviceable available market (SAM) quicker than the wafer fabrication equipment (WFE) market growth, gaining market share at key technological inflection points, and increasing the revenue of its Customer Support Business Group (CSBG) at a rate surpassing the growth of the installed base.
KeyBanc’s analysis suggests that the projected revenue compound annual growth rate (CAGR) from calendar year 2026 to 2028 would be in the low teens percentage, with an incremental margin in the mid-40% range. While acknowledging that the actual progress may not match this straightforward projection, analysts are optimistic that the industry cycle may provide a tailwind. Based on InvestingPro analysis, the company appears slightly overvalued at current levels, trading at a P/E ratio of 26.6x. However, with strong fundamentals including a return on equity of 50% and robust cash flows, the company maintains significant growth potential. For deeper insights into Lam Research’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 top US stocks with expert analysis and actionable intelligence.
In other recent news, Lam Research has provided significant updates that are drawing attention from investors. The company recently announced ambitious financial targets, projecting revenues between $25 billion to $28 billion and adjusted earnings per share of $6 to $7 by 2028. This forecast follows an optimistic investor day presentation, where Lam Research emphasized its strategic focus on expanding its serviceable available market and increasing its share in technological inflections. Additionally, the company introduced two innovative tools, the ALTUS Halo and Akara, aimed at enhancing AI chip production, reflecting its commitment to advancing semiconductor technologies.
Analysts are responding positively to these developments. Citi maintained a Buy rating on Lam Research, citing confidence in the company’s growth trajectory, while Cantor Fitzgerald reiterated an Overweight rating with a price target of $100. Cantor also anticipates a substantial increase in Lam Research’s dividend by 2028, aligning with the company’s projected earnings growth. The recent investor day, the first since March 2020, highlighted Lam Research’s strong positioning in the semiconductor industry, which is on a path toward a $1 trillion market. Despite some anticipated headwinds, Lam Research’s strategic initiatives and product innovations are fostering optimism among analysts and investors alike.
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