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Applied Materials Gets Cheers From Analysts After Earnings Beat Estimates

Applied Materials receives praise and price target boosts from analysts after 'another solid quarter of results.'

Applied Materials  (AMAT) - Get Applied Materials, Inc. Report had analysts singing its praises Friday after the semiconductor equipment maker posted stronger-than-expected fiscal third-quarter earnings and sales.

Shares of the Santa Clara, Calif., company were off slightly to $128.84 in premarket trading.

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Applied Materials reported adjusted profit of $1.90 a share, up from $1.06 a year ago and well above the analysts' consensus of $1.77.

Revenue soared 41% to $6.196 billion from $4.395 billion a year earlier, while Wall Street called for $5.94 billion in the latest quarter.

Mizuho analyst Vijay Rakesh raised his price target on Applied Materials to $161 from $158, while keeping a buy rating on the shares following the "solid" July quarter results and "positive" outlook.

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Rakesh continues to see Applied Materials as well-positioned and growing above the wafer fab equipment market.

Stifel analysts, who have a buy rating on the stock, raised their price target to $180 from $170 a share, Bloomberg reported. 

“Applied’s commentary was consistent with the strong near-term trends, while providing more support that the long-term outlook continues to strengthen," Stifel said, adding that the report suggests that “near-term concerns of a ‘peaking’
cycle are overblown.”

Morgan Stanley, which rates the shares equal weight, boosted its price target to $150 from $139, saying "Applied continues to execute well, and benefit from a strong spending environment across the board.”

The firm said that this was a strong report “with modest growth into October which we think is significantly limited by supply.” Morgan Stanley views Applied Materials as a core holding, although it is “mildly more optimistic” on peer Lam Research  (LRCX) - Get Lam Research Corporation (LRCX) Report.

Wells Fargo, which has an overweight rating on the shares with a price target of $160, said this was “another solid quarter of results, driven by continued strong demand upside (and) positive supply chain execution.”

The gross margin outlook should be viewed as a positive, as it “reflects the company’s aggressive supply chain management in the face of COVID-related disruptions.”