NEW YORK (TheStreet) -- Deutsche Bank raised its price target on Lam Research Corp. (LRCX) stock today to $95 from $81 and maintained its "buy" rating of the Fremont, CA-based supplier of wafer fabrication equipment (WFE) and services to the worldwide semiconductor industry.
"LRCX is well positioned to gain share in the WFE market, driven by a strong focus on technology inflection spending over the next few years," analysts said.
"We expect LRCX to continue to outgrow the WFE market in 2015 and 2016. Combined with an increased emphasis on shareholder returns, we expect valuation multiples to improve. Trading at 14x ex-cash versus a sector average of 17x, LRCX is attractively valued and is the cheapest among front-end equipment peers," analysts added.
Shares of Lam Research are down 0.15% to $83.99.
Separately, TheStreet Ratings team rates LAM RESEARCH CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate LAM RESEARCH CORP (LRCX) a BUY. This is driven by some important positives, 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 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."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 60.00% and other important driving factors, this stock has surged by 64.29% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- LAM RESEARCH CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LAM RESEARCH CORP increased its bottom line by earning $3.68 versus $0.67 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $3.68).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 65.0% when compared to the same quarter one year prior, rising from $85.51 million to $141.08 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 13.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- LRCX's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LRCX has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: LRCX Ratings Report