Nomura Downgrades Lam Research To Neutral, Wants Clarity On KLAC Acquisition

Nomura downgraded Lam Research Corporation (NASDAQ: LRCX) to Neutral as it awaits clarity on the acquisition of KLA-Tencor Corp (NASDAQ: KLAC), which would broaden Lam Research's end market exposure and increase margins, potentially resulting in multiple expansion.

However, Lam Research issued a press release extending the timeline for its merger with KLA-Tencor after receiving a request for more information from the Department of Justice. The company also disclosed that they still need approval from Korea, Japan and China.


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"We find this concerning considering management's track record of managing quarterly earnings expectations. Risk/reward is not compelling, as such, we believe investors should move to the sidelines until there is certainty on the KLAC acquisition," analyst Romit Shah wrote in a note.

Shah also cut the target price on Lam Research shares by $10 to $85, while expecting FY16 EPS at $6.45 and FY17 EPS at $6.80.

Shares of Lam Research closed Wednesday at $89.11, down 4.48 percent.


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorNewsDowngradesPrice TargetM&AAnalyst RatingsNomuraRomit Shah