Jefferies Raises KLA Price Target to $1,850

Jefferies analyst Blayne Curtis raised the price target on KLA Corporation (NASDAQ: KLAC) to $1,850.00 (from $1,500.00) while maintaining a Buy rating.

“WFE guide of HSD-LDD for C26 came in short of expectations after LRCX guided WFE up 23%.

KLA-specific supply constraints are limiting growth (especially in the first half) but not enough to explain this delta.

Definitely a dose of cold water, but we remain confident WFE will push much higher into C27 and still recommend the group.

More tempered WFE guide (+HSD-LDD) vs what LRCX laid out (+23%) overshadowed the beat and raise.

We are still quite bullish on WFE and expect the guide will prove conservative, but the supply constraints do suggest that KLAC will undergrow the market.

Another bottleneck for the year is clean room space, in line with commentary from LRCX, suggesting even more growth into 2027.

Another odd point is that KLAC’s AP market growth guide of HSD-LDD and revenue growth of Mid/ High-Teens is below the prior guide of 20% and below LRCX discussing 40%+ growth for the year.

DRAM pricing is expected to impact GMs for the year by 75-100bps, a temporary headwind but one that was certainly unexpected (though could be read as a positive for DRAM WFE demand if you want to look at the glass half full).

Despite these inconsistencies in growth expectations, we still believe KLAC would be a beneficiary of the expansion of Leading-Edge Foundry and DRAM as the bottlenecks subside and would be buyers on any post-call weakness.”

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