"AMAT is an underappreciated technology leader, in our view. We expect AMAT to benefit from multiple technology inflections in the next two to three years, which could drive wafer fabrication equipment (WFE) spending to $36 to $37 billion," analysts said about the Santa Clara-based provider of manufacturing equipment, services and software to the global semiconductor industry.
"The merger with TEL creates an entity with approximately 32% market share and enough scale to drive operating leverage. Combined with aggressive share repurchases, we see EPS of about $2 in 2016E and about $2.50 in 2017E," analysts added.
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Shares of Applied Materials are up 0.84% to $25.25 in pre-market trading.
Separately, TheStreet Ratings team rates APPLIED MATERIALS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLIED MATERIALS INC (AMAT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."