Bernstein Initiates Coverage on KLA at Outperform

Bernstein SocGen Group analyst Stacy Rasgon initiates coverage on KLA Corporation (NASDAQ: KLAC) with an Outperform rating and a price target of $1,700.00.

“Putting it all together, we estimate that KLA can grow revenue and EPS in the low double and mid double digits, respectively, over the next several years.

While valuation in the 30’s P/FE multiple is admittedly elevated, we believe a premium valuation to peers is warranted given structural industry growth drivers, a strong and durable competitive position with less China replacement risk, an attractive financial model and disciplined capital allocation, and a largely de-risked CY26 with probable upside to numbers as WFE estimates seem likely to move higher (with our estimates above consensus into FY27 and beyond).

We initiate coverage with an Outperform rating and $1,700 PT (~35x on our avg FY27/28 EPS of $48).”

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