Editors Note: This story has been amended to reflect Applied Materials' merger with Tokyo Electron not TE Connectivity as was previously reported
NEW YORK (TheStreet) -- Applied Materials (AMAT) shares are up 3.8% to $21.31 on heavy trading volume on Tuesday after having coverage initiated with a "buy" rating by analysts at Jefferies (JEF).
The positive coverage initiation rests on the firm's belief that the company will experience higher margins and cash returns due to it's proposed merger with Tokyo Electron (TOELY), which it expects to close this year.
"We are confident the merger would complete in 2014, and translate into increased pricing power and scale benefits. We believe AMAT is best positioned among semicap players to benefit from a combination of industry consolidation, technology inflections and foundry competition," said Jefferies analysts.
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TheStreet Ratings team rates APPLIED MATERIALS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLIED MATERIALS INC (AMAT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."