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Lam Research Lower Post Earnings; Caris Upgrades; ThinkEquity Downgrades
Posted by Eric Savitz
There are some serious cross-currents this morning in shares of semiconductor equipment maker Lam Research (LRCX).
Lam last night reported fourth quarter revenue that were above Street expectations; in an interview last with Tech Trader Daily, CEO Steve Newberry noted that shipments were up 12% in the quarter, but repeated previous warnings that the second half would be slower than the first as DRAM providers reduce their equipment purchases.
The Street’s reaction to the news has been decidedly mixed.
Caris & Co.’s Ben Pang raised his rating on the stock to Above Average from Average, asserting that the stock’’s valuation is attractive trading at 12x his 2008 EPS estimate of $4.75 a share. “We had been expecting market share gains to subside, but there is no evidence that their competitors are gaining ground,” he says.
Also bullish: Needham’s Robert Maire, who raised his price target on the stock today to $80 from $62, and repeated his Buy rating. “Not only has Lam gained share in the market it has also executed almost flawlessly,” he wrote today.
On the other hand, ThinkEquity’s Suresh Balaraman cut his rating to Source of Funds from Accumulate, and trimmed his price target to $50 from $55. “While the logic and foundry segment should recover from very depressed levels,” he writes, “the bulk production capacity expansion is likely to be at 90 nm, the nodes where Lam’s share is not as high. In the near-term, the DRAM spending cutback is likely to have a stronger negative effect.” He cut his June 2008 fiscal year revenue estimate to $2.4 billion from $2.5 billion, although EPS increases to $4.68 from $4.59.
Also cautious: Credit Suisse’s Satya Kumar, who repeated his Neutral rating on the stock, and cautioned that the company faces “multiple quarters of memory weakness,” and advises waiting until “memory truly bottoms.”
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LAM Research estimates raised at UBS. FY 2008 EPS estimates upped to $4.72 from $4.59 while price target holds at $70. Reiterates Buy rating. |
