UPDATE: Nomura Initiates Coverage on Lam Research Corporation with Buy Rating, $65 PT on Expected Benefits from Increased Memory Spending

In a report published Thursday, Nomura analyst Romit Shah initiated coverage on

with a Buy rating and $65.00 price target. In the report, Nomura noted, “We expect Lam to benefit from a substantial increase in memory spending over the next two years from $14bn to $24bn in 2015, driven by transitions to 2xnm and 20nm in DRAM and 3D NAND. Among the leading U.S. WFE suppliers, Lam has the highest exposure to the memory sector at 65% of sales in the March quarter. In addition, the recent push out EUV technology is a positive for the company. Valuation is attractive at 10x our CY15E EPS of $5.20, or 9x excluding $8 per share in net cash, well below KLAC at 12x and AMAT at 14x. Furthermore, a dividend could be in the company's future. Our TP of $65 is based on 11x CY15E EPS, plus $8 per share of cash.” Lam Research Corporation closed on Wednesday at $54.49.