UBS Lowers KLA Price Target to $1,770

UBS analyst Timothy Arcuri lowered the price target on KLA Corporation (NASDAQ: KLAC) to $1,770.00 (from $1,835.00) while maintaining a Neutral rating.

“KLAC reported in the upper half and guided only about in-line for both FQ4 (June) and the full year (below our model) – when juxtaposed against peers all taking numbers higher, this is likely to be viewed negatively.

We are very bullish on WFE growth through 2028 and beyond, but we continue to see KLAC struggling to keep up mostly because so much of the growth this year and next is coming from memory where its exposure, while improving, is structurally much lower than peers.

The company also tried to put a stake in the ground that 2027 will accelerate (we agree) but its WFE numbers still look too low to us both this year and next year based on what we see.

A key factor that we hear exciting some investors is the potential for INTC to spend a lot more over the next few years (which we think is likely).

It is true that INTC’s adoption of inspection has increased quite a bit recently, but we think it may only now be in line with a typical memory maker – so even if INTC spends more, it is still hard to see KLAC outgrowing WFE over the next 2-3yrs.

Ultimately, our estimates here are largely unchanged – if anything, a bit lower on C2026 EPS due to higher opex – and as much as we like SPE, we struggle to see the sort of estimate revisions that would seem to be required to drive a stock trading at 5-8x higher than peers who have better near-term growth profiles.

Our PT goes from $1,835 to $1,770, and we maintain Neutral.”

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