Applied Materials Gets Analyst Accolades After Earnings Report

Applied Materials analysts lauded the chipmaking-equipment provider after its earnings report. Demand is seen strong among foundry, logic and memory chipmakers.
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Applied Materials  (AMAT) - Get Report shares rose as analysts reacted positively to the chipmaking-equipment company’s earnings report.

For the fiscal 2020 first quarter ended Jan. 26, Applied Materials reported earnings per share totaled 96 cents, up 20%, and adjusted earnings registered 98 cents, up 21%.  Revenue reached $4.16 billion, up 11% from a year earlier. 

A survey of analysts by FactSet produced consensus estimates of 92 cents of profit, or an adjusted 91 cents, on $4.09 billion of revenue.

The Santa Clara, Calif., company expects Q2 adjusted earnings per share of 98 cents to $1.10. It projects net sales at $4.34 billion, plus or minus $200 million. 

The FactSet survey was looking for GAAP and adjusted profit of 91 cents a share on sales of $4.05 billion.

At last check, Applied Materials shares traded at $68.37, up 4.6%. The stock on Thursday touched a 52-week high at $68.41.

The “upbeat earnings report" is "supported by a solid beat and raise combined with an overall 2020 outlook that suggests a material increase to consensus estimates,” Evercore ISI Analyst C.J. Muse wrote in a report, according to Bloomberg.

He has a rating of outperform for the stock and raised his price target to $82 from $75.

KeyBanc Capital analyst Weston Twigg has an overweight rating and raised his target to a Wall-Street-high $86 from $70, Bloomberg reports.

“Foundry/logic demand is expected to remain strong all year, with likely improving memory demand later in the year,” he wrote in a report.

He noted that Applied Materials isn’t overly concerned about the coronavirus. The company sees the risk there “as more of a timing issue, seeing early signs of a return to normalcy,” Twigg said.

To be sure, this was before Thursday’s news of a large increase in reported coronavirus cases and deaths in China.