- Believing the company will offer soft FQ4 (June quarter) guidance to go with its April FQ3 report, Needham's Edwin Mok has cut his Lam Research (LRCX -0.2%) target by $2 to $93, while reiterating a Buy. Longer-term, he still expects Lam to perform well thanks to a 2H15 sales pickup driven by the company's strong exposure to FinFET (3D transistor) and 3D NAND process investments.
- Meanwhile, Mok has downgraded Ultra Clean (UCTT -8.6%) to Hold, citing expectations "for a weaker 2Q15 in the SemiCap space and the lack of growth driver for the year." He sees DRAM push-outs hurting Q2 sales, and thinks efforts to win new business will take time to bear fruit.
- Lam is missing out on a market rally, while Ultra Clean is off sharply. Lam sold off on Wednesday after JPMorgan reported Samsung is slowing the pace of its DRAM investments. Mok downgraded chip manufacturing materials supplier Cabot Microelectronics on Monday.