Applied Materials got bullish views from several analysts, following its fiscal second-quarter earnings beat.
Morgan Stanley analyst Joseph Moore boosted the price target on the semiconductor equipment company’s shares to $139 from $137.Moore maintained an Equal-weight rating on the shares.
Moore noted that tight supply conditions led to better near-term spending conditions, thereby boosting Applied Materials’ performance relative to peers in the quarter. However, even as the company’s guidance implied continued wafer fab equipment, or WFE, growth through 2022, Morgan Stanley sees the growth plateauing ahead in the second half of 2021.
Needham analyst Quinn Bolton reiterated a Buy rating and $153 price target. Bolton mentioned that quarterly results were solid, and the guidance for a sequential growth in third quarter results implies about 40% year-over-year growth in Semiconductor Systems Group revenues in calendar year 2021. According to the analyst, Applied Materials will see mid- to high-single digit growth in calendar year 2022 given semiconductor industry megatrends.
"We believe that AMAT's stock will find support at its current level of 16.8x our CY22 EPS estimate, and that the risk/reward is favorable, " Bolton noted.
Credit Suisse analyst John Pitzer reiterated an Outperform rating on Applied Materials shares along with a $175 price target.
Pitzer cited second-quarter results that surpassed expectations and the strong third-quarter guidance – which, according to the analyst, reflect rising cost of capacity without 450 mm, driving structural WFE growth.
But Pitzer mentions risks from slowing EPS revisions in the second half of 2021 and WFE pauses in 2023. Nevertheless, the analyst indicated that structural foundations of over $100 billion in WFE and $11-plus EPS are becoming more certain.
The Aroon Indicator for AMAT entered a downward trend on April 23, 2024. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 114 similar instances where the Aroon Indicator formed such a pattern. In of the 114 cases the stock moved lower. This puts the odds of a downward move at .
The Momentum Indicator moved below the 0 level on April 17, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on AMAT as a result. In of 86 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
AMAT moved below its 50-day moving average on April 17, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for AMAT crossed bearishly below the 50-day moving average on April 23, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMAT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where AMAT's RSI Oscillator exited the oversold zone, of 20 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
AMAT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 63, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AMAT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.950) is normal, around the industry mean (6.442). P/E Ratio (24.546) is within average values for comparable stocks, (112.323). Projected Growth (PEG Ratio) (2.493) is also within normal values, averaging (2.518). Dividend Yield (0.006) settles around the average of (0.021) among similar stocks. P/S Ratio (6.631) is also within normal values, averaging (34.699).
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a manufacturer of equipment and software for the semiconductor industries
Industry Semiconductors