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On Friday, Needham increased the price target for KLA Corporation (NASDAQ:KLAC) to $830 from the previous target of $800, while reiterating a Buy rating on the stock. The adjustment follows KLA’s announcement of a strong quarterly performance, exceeding expectations and raising future projections. According to InvestingPro data, KLA’s current market capitalization stands at $99.31 billion, with the stock trading near its 52-week high. Analysis suggests the stock is currently trading above its Fair Value, though multiple InvestingPro Tips highlight the company’s strong financial position and consistent dividend history.
KLA Corporation, a key player in the semiconductor industry, reported robust financial results that surpassed analyst forecasts. The company’s strong performance is reflected in its impressive 12.15% revenue growth over the last twelve months, as reported by InvestingPro. The company provided conservative guidance, suggesting a steady revenue run-rate of $3 billion per quarter through calendar year 2025. This guidance indicates an 11% total revenue growth, supported by mid-single-digit percentage growth in the wafer fabrication equipment (WFE) market. The company maintains a healthy financial position with a current ratio of 2.36, indicating strong liquidity.
The firm’s management anticipates a surge in leading-edge logic manufacturing, which is expected to increase process control intensity and, consequently, expand KLA’s share in the WFE market by 2025. Despite projecting a decline in their China business by low-20s percent for 2025, which is estimated to be around 22%, KLA expects this to be more than compensated by a growth of over 30% in markets outside of China, estimated at 34% for the current year.
In contrast to its peers, whose forecasts suggest a first-half-year weighted performance, KLA envisions a more evenly distributed growth throughout the year, with potential additional gains from major clients such as Intel (NASDAQ:INTC), Samsung (KS:005930), and opportunities in the Chinese market. The company’s management has taken steps to mitigate risks in their outlook, aiming to provide a stable and more secure investment option within the volatile WFE sector.
Needham’s revised price target reflects confidence in KLA’s ability to maintain stability and offer an attractive risk/reward balance in the current market environment. The firm’s analysts believe that KLA’s prudent guidance and potential for market share expansion justify the heightened price target and the continued recommendation for investors to purchase the stock. With a strong return on equity of 97% and an impressive dividend growth of 30.77% over the last twelve months, KLA demonstrates solid fundamentals. For deeper insights into KLA’s financials and access to over 12 additional ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro.
In other recent news, KLA Corporation has been the subject of several notable revisions and upgrades. Morgan Stanley (NYSE:MS) increased their price target for KLA to $748, citing stronger equipment results. Similarly, Goldman Sachs raised their price target to $864, influenced by KLA’s impressive financial results and positive forecasts. Cantor Fitzgerald also maintained a positive outlook on KLA, anticipating modest fourth-quarter earnings beats and an adjustment to the 2025 earnings per share estimates.
Needham analysts upgraded KLA Corporation’s stock rating from Hold to Buy, reflecting confidence in the company’s performance and its ability to outperform competitors. Meanwhile, Taiwan Semiconductor Manufacturing Co. announced a robust capital expenditure target for 2025, leading to significant gains in shares of semiconductor equipment manufacturers, including KLA Corporation.
ASML (AS:ASML) reported record net sales of €9.3 billion for the fourth quarter of 2024, surpassing expectations. This robust earnings report led to an increase in shares of semiconductor equipment manufacturers, including KLA Corporation. These are the recent developments, providing investors with a snapshot of the sector’s current landscape.
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