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On Thursday, TD Cowen analysts revised their outlook on Lam Research stock (NASDAQ:LRCX), increasing the price target from $100.00 to $110.00 while maintaining a Buy rating. The adjustment follows Lam Research’s Analyst Day event in New York City, where the company presented a target business model that exceeded expectations. This was notable despite conservative forecasts for the NAND Wafer Fabrication Equipment (WFE) market. According to InvestingPro data, 24 analysts have recently revised their earnings estimates upward for the upcoming period, reflecting growing confidence in the company’s prospects. With a market capitalization of $116.54 billion, Lam Research stands as a prominent player in the Semiconductors & Semiconductor Equipment industry.
Analysts at TD Cowen highlighted that the new target model suggests potential market share gains for Lam Research in Atomic Layer Deposition (ALD) and conductor etch technologies, particularly within the DRAM and Foundry/Logic segments. The firm’s optimistic stance is further supported by Lam Research’s position as their top pick for the year 2025. The company’s strong market position is reflected in its impressive 13.21% revenue growth and healthy gross profit margin of 47.73%. InvestingPro analysis indicates the stock is trading at a P/E ratio of 26.64, suggesting premium valuation relative to near-term earnings growth potential.
During the Analyst Day, Lam Research’s management shared projections for its Customer Support Business Group (CSBG), anticipating a compound annual growth rate (CAGR) of at least 10% through Calendar Year 2028. This growth is expected to drive revenue to 1.5 times the levels of Calendar Year 2024. While this forecast is a few percentage points below the company’s historical performance, TD Cowen attributes this to management’s conservative outlook, particularly concerning the Reliant product line, which is estimated to account for a significant portion of CSBG revenue.
The updated price target and sustained Buy rating reflect a confidence in Lam Research’s strategic direction and potential for continued growth in the semiconductor equipment industry. The company’s Analyst Day presentation provided insights into its financial targets and growth strategies, which have been received positively by TD Cowen analysts.
In other recent news, Lam Research has reported significant developments that are catching the attention of investors. The company recently held an investor day where it projected revenues to range between $25 billion to $28 billion by 2028, with adjusted earnings per share of $6 to $7. This optimistic outlook aligns with Lam Research’s strategic initiatives to expand its serviceable available market (SAM) and capitalize on technological advancements in the semiconductor industry. Susquehanna analysts have upgraded Lam Research’s stock rating from Neutral to Positive, raising the price target to $125, citing the company’s strategic expansion and financial strategies. KeyBanc Capital Markets also increased its price target for the company from $95 to $105, maintaining an Overweight rating and expressing confidence in Lam Research’s performance.
Additionally, Citi has reiterated its Buy rating with a price target of $87, driven by the company’s focus on expanding its SAM and its growth projections in the Customer Support Business Group (CSBG). Lam Research has also introduced two new tools, ALTUS Halo and Akara, designed to enhance the production of advanced AI chips, positioning the company to meet the rising demand for semiconductor devices. These tools are expected to bolster Lam Research’s competitive edge against other major industry players like Applied Materials (NASDAQ:AMAT) and ASML (AS:ASML). The recent developments reflect a strategic push by Lam Research to leverage its innovative capabilities and capitalize on the growing demand in the semiconductor market.
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