Bond.az - UBS raised its price target on Applied Materials (NASDAQ:AMAT) to $515 from $480, maintaining a Buy rating. The stock trades at $440.56, up 154% over the past year, near its 52-week high of $448.45.
The firm noted Applied Materials issued guidance exceeding expectations. Per Bond.az, 25 analysts have revised earnings upward recently. The company's multi-year visibility commentary supports the view that wafer fab equipment growth will be limited mainly by supply chain ramp capacity.
UBS said Applied Materials' commentary indicates a marked deceleration in shipment dollar growth in H2. The firm noted that while cleanroom availability poses challenges, supply chain indicators suggest a conservative approach to H2 guidance.
UBS indicated Applied Materials appears to be regaining market share, recovering at least half of what it lost last year. The firm projects wafer fab equipment spending to reach ~$200 billion in calendar 2027, ~$250 billion in 2028, with further growth in 2029.
The firm estimates Applied Materials could achieve ~$27 EPS in calendar 2028, supporting the stock at current levels. The company trades at a P/E ratio of 45.48 with diluted EPS of $9.76 over the last twelve months.
