Stifel Raises KLA Price Target to $1,700
Stifel analyst Brian Chin raised the price target on KLA Corporation (NASDAQ: KLAC) to $1,700.00 (from $1,600.00) while maintaining a Buy rating.
“F2Q(Dec) results and F3Q(Mar) guidance slightly ahead of ours/consensus estimates KLA projects industry WFE of low-$120B, or mid-$130B fully loaded (incl. advanced packaging) representing +lowteens YY growthKLA expects its process control revenue to grow faster than this WFE growth rate.
Notably, KLA’s industry WFE growth outlook diverges significantly from LRCX’s (low-20% YY growth).
Explanation: different base-years and definitions of the addressable market? KLA sees DRAM WFE (+high-teens YY) outgrowing Foundry-Logic (+low-teens YY).
Nearer-term, extended equipment lead-times and lack of customer fab availability is driving a more modest revenue uptick in 1H.
On further alleviation of these constraints, KLA expects revenue to accelerate in 2H.
Given sentiment ahead of the call, we believe KLA’s outlook and a lack of bigger upward estimate revisions will be viewed as slightly disappointing.
Yet we believe KLA remains a core, high quality holding amidst a strengthening semi spending environment and we maintain our Buy rating and increase our target price to $1,700.”
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