Why Analysts Like Applied Materials So Much After Earnings

Technology

Published: February 21, 2016 11:15 am

Last Updated: January 13, 2020 12:55 pm

Applied Materials Inc. (NASDAQ: AMAT) reported its fiscal fourth-quarter financial results after the markets closed on Thursday. Investors and analysts alike viewed these earnings as particularly favorable for the semiconductor giant, especially looking ahead to the spring quarter.

The company had $0.29 in earnings per share (EPS) on $2.37 billion in revenue, versus Thomson Reuters consensus estimates of $0.25 in EPS on revenue of $2.24 billion. The same period from the previous year had EPS of $0.27 and revenue of $2.36 billion.

For the first quarter, the company expects net sales to be down 2% to 9% sequentially, while EPS are expected in the range of $0.23 to $0.27. Consensus estimates call for $0.26 in EPS on $2.28 billion in revenue.

Merrill Lynch detailed in its report:

Applied Materials reported good January results. More importantly, the April Quarter guidance was ahead of our/Street estimates. The WFE spending recovery driven by 3D NAND & eventually 10nm benefits Applied Materials. OLED adoption is helping Display sales. Margins should expand as the year progresses. Reiterate Buy rating and $23 price objective.

ALSO READ: How Analysts Now View NVIDIA After Earnings

A few other analysts weighed in on Applied Materials after the earnings report:

Cowen has an Outperform rating and raised its price target to $23.00 from $21.50.
Credit Suisse has an Outperform rating and raised its price target to $23.00 from $22.50.
Deutsche Bank has a Buy rating and raised its target price from $20 to $22.
Morgan Stanley has an Overweight rating and raised its price target to $23 from $22.
Needham upgraded it to Buy from Hold with a $22 price target.
B. Riley has a Neutral rating and raised its price target by $1.50 to $19.50.
UBS increased its price target to $18.75 from $18.00.
S&P Capital IQ maintained a Hold rating.
Morningstar has a Buy rating and a $20 fair value estimate.

Shares of Applied Materials ended last week at $18.38, with a consensus analyst price target of $21.60 and a 52-week trading range of $14.25 to $25.64.

Smart Investors Are Quietly Loading Up on These “Dividend Legends” (Sponsored)

If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.

Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.