Lam Research stock target cut to $100 at TD Cowen

On Thursday, TD Cowen adjusted its price target for Lam Research (NASDAQ:LRCX) shares, lowering it to $100 from the previous $110, while still maintaining a Buy rating on the stock. According to InvestingPro data, Lam Research currently trades at an attractive PEG ratio of 0.74, suggesting reasonable valuation relative to its growth prospects. The firm’s analysts pointed to higher deposition/etch intensity and a recovery in NAND Wafer Fabrication Equipment (WFE) as key catalysts for the company’s future growth. According to the analysts, the June quarter outlook surpassed consensus revenue estimates by 9%, bolstered by demand in NAND and Foundry sectors, including Chip on Wafer on Substrate (CoWoS) and Gate-All-Around (GAA) technologies.

TD Cowen’s analysts believe these results are positive signs for Lam Research, which is focusing on expanding its market share in the Foundry segment. As a prominent player in the Semiconductors & Semiconductor Equipment industry, the company has demonstrated strong performance with revenue growth of 13.21% over the last twelve months. This segment is currently experiencing early growth in deposition/etch intensity, with technologies like GAA and Bulk Silicon Photonics Detector (BSPD) driving this trend. Furthermore, the opportunity for recovery in the NAND WFE market is still ahead, as current levels of NAND WFE are less than half of the previous cyclical peak.

The valuation of Lam Research by TD Cowen is based on a Sum of the Parts (SOTP) approach. The analysts have assigned a 20x earnings multiple to the company’s Systems business and a 30x multiple to the Services segment. This blended multiple of 23x on the projected Calendar Year 2026 Earnings Per Share (EPS) of $4.40 has led to the revised $100 price target. InvestingPro analysis reveals the company maintains strong financial health with a "GOOD" overall score, supported by robust liquidity and moderate debt levels. For deeper insights into Lam Research’s valuation and 12+ additional exclusive ProTips, consider accessing the comprehensive Pro Research Report available on InvestingPro.

The maintenance of the Buy rating reflects the analysts’ continued confidence in Lam Research’s potential for growth, despite the lowered price target. The firm’s strategic focus on the Foundry segment and the anticipated NAND WFE market recovery are expected to be significant drivers of Lam Research’s performance in the coming years.

In other recent news, Lam Research Corporation reported financial results for the third fiscal quarter of 2025, surpassing consensus estimates with revenue and earnings per share (EPS) exceeding projections by 2% and 3%, respectively. The company also provided guidance for the fourth fiscal quarter, forecasting revenue and EPS to be 9% and 23% higher, respectively, than previous estimates. KeyBanc Capital Markets maintained an Overweight rating with a price target of $105, noting Lam Research’s record margin quarter and confident outlook. JPMorgan, however, adjusted its price target for Lam Research to $95 from $110, citing potential medium-term demand downturns due to trade issues, despite maintaining an Overweight rating.

Berenberg reiterated a Buy rating with a $90 price target, acknowledging the company’s stable wafer fabrication equipment (WFE) capital expenditure estimates amidst tariff concerns. Evercore ISI raised its price target to $99, emphasizing Lam Research’s potential benefits from technological advancements in semiconductor equipment. The company reported a 49% gross margin for the March quarter, attributed to an agile supply chain and a new facility in Malaysia. Lam Research anticipates stable revenue from China despite export restrictions, with plans to continue leveraging its strong position in DRAM, NAND, and advanced packaging technologies.

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