KLA's Latest Launch Gets Thumbs Up From Analyst; Micron's Deteriorating Fundamentals Leads To Re-Rating

  • Wells Fargo analyst Joseph Quatrochi maintained KLA Corp KLAC with an Overweight and raised the price target from $360 to $420.
  • Post-market close on December 6, KLA launched the Axion T2000 metrology system, which leverages x-ray to measure complex vertical structures of advanced memory chips
  • KLA highlighted multiple systems in operation at leading memory customers for 3D NAND and DRAM. 
  • The company highlighted that the Axion T2000 could be used in R&D to achieve fast learning cycles, reducing dependence on the long lead time and destructive measurement methods and accelerating ramp cycle time. 
  • Quatrochi believes KLA should trade at a premium to Applied Materials, Inc AMAT and Lam Research Corp LRCX, given a greater than 60% share of the addressable market and a higher gross and EBIT margin structure.
  • Wells Fargo analyst Aaron Rakers maintained Micron Technology Inc MU with an Overweight and lowered the price target from $75 to $70.
  • Rakers would not be surprised to see MU shares trade lower ahead of the upcoming F1Q23 earnings release. 
  • Weakening fundamentals leave the analyst to now model non-GAAP EPS losses through F2023, down-cycle bottom shifting to mid and 2H2023 vs. prior 1H2023 expectation. 
  • Price Action: KLAC shares traded higher by 1.38% at $388.52 on the last check Wednesday.
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