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On Thursday, Cantor Fitzgerald maintained an Overweight rating and a $100.00 price target for Lam Research stock (NASDAQ:LRCX). According to InvestingPro data, 24 analysts have recently revised their earnings estimates upward for the upcoming period, while the company maintains a robust market capitalization of $116.54 billion. Based on InvestingPro’s Fair Value model, the stock currently appears to be trading above its Fair Value. During an analyst day held in New York, Lam Research presented its updated financial model for calendar year 2028, including its strategy for market share expansion and technological advancements. The company, which InvestingPro identifies as a prominent player in the Semiconductors & Semiconductor Equipment industry, is aiming for a Serviceable Available Market (SAM) share of over 30% of the Wafer Fabrication Equipment (WFE) market, with expectations to capture more than 50% of its incremental SAM. This translates to an anticipated increase in Lam’s WFE share from approximately 9.6% in calendar year 2024 to around 12.5%. The company’s strong financial health score of GOOD from InvestingPro and impressive return on equity of 50% support its ambitious expansion plans.
The company’s strategy is supported by technological shifts in key areas such as NAND, where a transition from 1xxL to greater than 5xxL is expected, DRAM moving from 6F2 to 3D DRAM, and Foundry Logic advancements including Gate-All-Around (GAA) and Backside Power technologies. These developments are projected to significantly increase Lam’s SAM per wafer.
Lam Research unveiled two new tools at the event, the ALTUS Halo and Akara Direct Drive etch tool, which are currently being introduced to customers. The company’s management also emphasized progress in their Customer Support Business Group (CSBG), noting that artificial intelligence-enabled predictive maintenance and the new Dextro Cobot are anticipated to contribute to a 10% revenue Compound Annual Growth Rate (CAGR) through calendar year 2028.
The company’s financial targets suggest a doubling of its earnings power over the next four years. The estimated Earnings Per Share (EPS) midpoint for calendar year 2028 stands at $6.50, reflecting an 18% growth CAGR from $3.36 in calendar year 2024. Current financial metrics from InvestingPro show strong momentum, with revenue growth of 13.21% and a P/E ratio of 26.64. The company has also demonstrated commitment to shareholder returns with a 15% dividend growth rate. For deeper insights into Lam Research’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. This estimate aligns with Cantor Fitzgerald’s preview, which also projected an EPS of $4.65 for calendar year 2026. Based on these projections and applying a 22x multiple to the CY28 target model midpoint, Cantor Fitzgerald analysts see potential for the stock to reach $150 in the longer term.
In other recent news, Lam Research has introduced two new tools aimed at enhancing the production of advanced AI chips, a move that aligns with the growing demand for semiconductors in AI applications. The ALTUS Halo, a deposition tool, incorporates molybdenum into semiconductor layers to boost chip performance, while the Akara tool focuses on precise etching for chip functionality. Analysts from TD Cowen have increased their price target for Lam Research to $110, maintaining a Buy rating, following the company’s Analyst Day presentation that exceeded expectations with a promising business model. Susquehanna has also upgraded Lam Research from Neutral to Positive, raising the price target to $125, citing strategic market expansion and potential benefits from Samsung’s Memory business recovery by 2025.
KeyBanc Capital Markets adjusted their price target for Lam Research to $105, highlighting the company’s strategic plan to double its revenue and EPS by 2028. Citi reaffirmed its Buy rating with an $87 target, noting Lam Research’s focus on expanding its serviceable available market and capitalizing on technology inflections in NAND and DRAM. These developments reflect a positive sentiment among analysts regarding Lam Research’s strategic direction and growth potential in the semiconductor equipment industry. The company’s recent tools and strategic plans position it to compete with major industry players like Applied Materials (NASDAQ:AMAT) and ASML (AS:ASML), as it continues to serve key customers such as Micron Technology (NASDAQ:MU), Samsung Electronics (KS:005930), and TSMC.
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