JPMorgan Raises Lam Research Price Target to $300
JPMorgan analyst Harlan Sur raised the price target on Lam Research (NASDAQ: LRCX) to $300.00 (from $165.00) while maintaining an Overweight rating.
“Results, guidance and management commentary all point to a highly favorable outlook for LRCX and the broader WFE/semicap complex not just in CY26, but well into CY27: (1) customer expedite requests remain elevated amid a rush to ramp node/technology transitions, and LRCX has done well operationally and from a supply chain management perspective to keep pace with these requests; (2) China revenue should prove more resilient in CY26 than previously anticipated following adjustments to U.S. affiliate rules; (3) even in a capacity constrained environment, LRCX sees WFE growing ~23% Y/Y to ~$135B in CY26 – ahead (we think) of what many had been modeling (including our recently revised +15- 20% estimate), and with potential for upside given the strong likelihood of major customers ratcheting up capex incrementally through CY26; (4) on top of underlying strong growth in WFE, LRCX is positioned to capture further share of spend in CY26 amid rising dep/etch intensity (to which it is highly levered), coupled with growth in its advanced packaging business that is set to far outpace broader WFE growth (>40% Y/Y); and (5) CSBG growth is tracking ahead of LRCX’s installed base (revenue was +8% Y/Y in CY25 vs +6% growth in installed base units), with mgmt framing future growth as potentially low-double-digits% (i.e. an acceleration from recent levels), driven in part by a reorientation of the services business more towards preventative maintenance (bolsters top-line growth) and increasing upgrade activity (NAND).
Gross margin does remain under pressure as the mix of accretive China revenue moderates, but this will likely be more than offset by a ramping top-line (fixed cost leverage).
Net, our EPS estimates go up meaningfully and we are increasing our PT from $165 to $300 based on $8 of EPS power exiting CY26, multiplied by a global equipment peer multiple of 35-40x.”
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