Credit Suisse Raises Price Target On Applied Materials
Credit Suisse raised its price target on Applied Materials, Inc. (NASDAQ: AMAT) from $26 to $30 Tuesday and maintained an Outperform rating.
Analysts Farhan Ahmad and John W. Pitzer assumed coverage of the stock and expected “that the merger with Tokyo Electron (TEL) will close in C1H15" and they saw "a favorable risk/reward profile, with upside potential of +56 percent and downside risk of -2 percent.”
“Following the merger, we expect (1) acceleration in cash returns, (2) lower variability in revenues (and hopefully cash flows), and (3) reduced risk to technology inflections. We argue that multiples will expand once clarity on the merger emerges,” according to the analyst note.
Ahmad also expected “strong C1H15 revenue guide from SemiCap companies, and CapEx guidance from Semi companies will likely be viewed favorably.”
The analysts modeled “CY15/CY16 EPS of $1.36/$1.55, almost in-line with the Street at $1.36/$1.55, respectively. For combined AMAT+TEL, we estimate CY16/CY17 EPS of $1.89/$2.36 if all the synergies are realized and $1.77/$2.09, respectively, if there is a hold-separate required, which we think is a worst-case scenario for remedies.”
Applied Materials closed Tuesday at $23.63, up 0.68 percent.
Latest Ratings for AMAT
|Dec 2016||Goldman Sachs||Downgrades||Buy||Neutral|
|Oct 2016||Goldman Sachs||Maintains||Buy|
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