Cantor Fitzgerald Reiterates Overweight Rating on KLA
Cantor Fitzgerald analyst C.J.
Muse reiterated an Overweight rating and $1,850.00 price target on KLA Corporation (NASDAQ: KLAC).
“mgmt. expects to secure 9.0% of WFE share vs. 7.4% in CY25 and 50bps above our previewed 8.5%.
Within this, we highlight a critical driver of increased spending across Advanced Packaging where customers are aggressively asking for front-end tools to be made available for the back-end (wafer level chip yield, 3D stacking, 2.5D Assembly).
Here, KLA highlighted $950M in revenues in CY25, with 40% share of the Advanced Packaging PC market (vs.
10% in CY20, 40% in CY24), and with plans to grow share above 50% over time – with SoIC adoption a potentially meaningful upside driver.
It is also worth highlighting Service as an important growth driver (raised 1% to grow at 13-15% CAGR), helped by installed base of >57k tools, revenue per tool growing 3x in the last 20yrs, and an attach rate of over 80% of tools in 2025 – all of which supports a steady revenue stream and provides the confidence to support KLA’s ever-growing dividend.
All-in-all a good day, with our stretch goal of $100 in EPS clearly doable (high end of guide was $92).
With shares at 14x this stretch goal, we do envision a scenario where shares can double over the next 4 years. We reiterate our OW rating and $1,850 PT. KLA remains a TOP PICK.”
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