Can KLAC Get Its Mojo Back?
Stephen Simpson, CFA
Stephen Simpson, CFA
Yesterday, 12:48 PM
- Sets $80 price target (current price $68.88).
- Analyst Timothy Arcuri sees Lam Research (LRCX +1%) a better investment resulting from a potential merger with KLA-Tencor (KLAC +1.9%), though remains positive on the latter regardless. He cites a 3 to 1 risk to reward upside ratio with or without a deal.
- A finalized agreement between the companies has been anticipated since last October, though regulatory hurdles have continued to delay the process. Arcuri further attributes possible closed-door hesitancy to the Lam Research side.
- KLA-Tencor is up around 30% since right before (October 19, 2015) the merger was proposed, with Lam Research up around 40% over the same period.
Thu, Aug. 11, 11:36 AM
- On news yesterday that Lam Research (LRCX -0.1%) and KLA-Tencor (KLAC +0.4%) are extending their timeline for a merger, Nomura Securities analyst Romit Shah downgrades the former to a Neutral rating and sets an $85 price target ($88.94 current price).
- He notes: "We find this concerning considering management's track record of managing quarterly earnings expectations. Risk/reward is not compelling, as such, we believe investors should move to the sidelines until there is certainty on the KLAC acquisition."
- He projects FY 2016 EPS of $6.45 and FY 2017 EPS of $6.80.
Wed, Aug. 10, 3:00 PM
Wed, Aug. 10, 12:51 PM
- In a press release issued today, the companies state "it has become more likely that obtaining regulatory clearances in one or more of the remaining jurisdictions may extend beyond October 20, 2016, the outside date set forth in the merger agreement."
- The deal was originally announced last October and has faced multiple hold-ups from the U.S. Department of Justice and regulatory agencies in Korea, Japan and China in the process.
- KLA-Tencor (KLAC -8.7%) and Lam Research (LRCX -4.1%) shares are trading on high volume at 3.81M vs. an average of 970,370 and 3.63M vs. an average of 2.16M, respectively.
Thu, Aug. 4, 5:47 PM
Thu, Jul. 28, 10:29 AM
Wed, Jul. 27, 5:35 PM
- ACTG, AFL, AIV, AJG, ALDW, ALGN, ALJ, AMZN, ARII, ATEN, ATR, AUY, BCOV, BGS, BIDU, BOOM, BRKS, CAA, CATM, CBL, CBS, CENX, CHMT, CLD, CLMS, COLM, COWN, CPHD, CPT, CUBE, CWST, CY, DECK, DGI, DGII, DLR, DTLK, ECOL, EEP, EGO, EHTH, EIX, ELLI, EMN, EQC, ES, ESS, EXPE, EYES, FE, FET, FICO, FII, FIX, FLS, FPO, FR, FTNT, GIMO, GNMK, GOOG, HIG, HLS, IM, INVA, INVN, ISIL, ITGR, IXYS, KAMN, KBR, KLAC, KRG, LEG, LMNX, LPLA, LYV, MATW, MOBL, MSCC, MSTR, MTD, N, NGVC, NR, NSR, OMCL, OUTR, PCCC, PDFS, PFG, PXLW, QGEN, QSII, RGA, RMD, ROVI, RSG, RTEC, SB, SBAC, SKYW, SNMX, SPNC, SRCL, STMP, STRZA, SYNA, TCO, TFSL, THG, TLGT, TNDM, UCTT, ULH, VCRA, VDSI, VRSN, WDC, WLK, WRI, WYNN, YRCW
Fri, May 20, 10:56 AM
- Lam Research (LRCX +4.1%), KLA-Tencor (KLAC +2.3%), ASML (ASML +2.2%), Axcelis (ACLS +3.9%), Kulicke & Soffa (KLIC +3%), Ultratech (UTEK +3.5%), Teradyne (TER +2.3%), Rudolph Technologies (RTEC +2.6%), and Xcerra (XCRA +2.7%) are outperforming after Applied Materials (AMAT +13.2%) beat FQ2 estimates, provided FQ3 guidance that was well above consensus, and reported FQ2 orders rose 52% Q/Q and 37% Y/Y to $3.45B. The Nasdaq is up 1.2%.
- Applied's order growth was fueled in large part by display equipment orders totaling $700M, up sharply from $183M in the prior quarter and $120M a year ago. On its earnings call, AMAT said display order strength is likely to continue "over the rest of 2016," and is being driven by mobile-related OLED investments - many reports have indicated Apple plans to bring iPhones sporting OLEDs to market next year.
- OLED materials/IP provider Universal Display (OLED +5.2%) is rallying. As are display panel makers LG Display (LPL +6.5%) and AU Optronics (AUO +3.2%), each of which have been stepping up their OLED investments, and industrial laser maker Coherent (COHR +2.5%), which has recently seen an OLED-related order surge.
- Also: Applied's NAND flash-related orders more than doubled Y/Y to nearly $1B thanks to its customers' 3D NAND investments. That more than offset softer DRAM and foundry-related chip equipment demand. On the call, Applied suggested NAND orders will slow a bit in the second half of FY16, but remain strong overall. Foundry demand is expected to grow somewhat this year, with Applied gaining share. Industry wafer fab equipment demand is expected to be flat to slightly up.
- B. Riley has upgraded Applied to Buy, and several firms have hiked their targets. Cowen's Tim Arcuri thinks $3 in annual EPS is now possible. Credit Suisse's Farhan Ahmad: "AMAT is clearly outgrowing peers this year, driven by favourable mix shift within WFE (NAND/Foundry increasing, DRAM declining) and strong growth in Display (China/OLED investments)."
Fri, May 13, 7:18 PM
- In an update on their pending merger, Lam Research (NASDAQ:LRCX) and KLA-Tencor (NASDAQ:KLAC) say they've each gotten a new request from the Justice Dept.
- It's a second request for more information and documentary material tied to the transaction, and the two say they are working with DOJ staff on a consent decree.
- The tie-up has gotten clearance in Germany, Ireland, Israel and Taiwan, and they say they're working with regulators elsewhere and still expect to close the deal in Q3.
- Both stocks were flat in after-hours action.
- Now read The Market Will Catch Up To Lam Research »
Thu, May 5, 5:47 PM
Tue, Apr. 26, 6:19 PM
- KLA-Tencor (NASDAQ:KLAC) is off just 2.6% after hours now following a miss on revenues in fiscal Q3, though profits easily beat expectations and the company guided strong on the coming quarter.
- Revenue breakout: Product, $530.6M (down 6.1%); Service, $181.8M (up 4.9%). Shipments were up 5% sequentially to $769M.
- With a merger with Lam Research (NASDAQ:LRCX) ahead, it's discontinued conference calls and has dropped guidance on quarterly backlog and bookings.
- In its investor letter, it said it expected "continued order momentum and high levels of business activity, highlighted by strong customer acceptance of new products." For the second half, revenue and earnings should be flat to up slightly vs. the first half.
- Press Release
- Now read Making Sense Of The Lam Research - KLA-Tencor Merger »
Tue, Apr. 26, 4:18 PM
Mon, Apr. 25, 5:35 PM
- AAPL, AFL, AIZ, AKAM, ARAY, ARI, ASH, AXS, BEAT, BLDP, BRX, BWLD, BXMT, BXP, BYD, CHRW, CINF, CLMS, CMG, COF, CREE, CRUS, CUDA, CVA, EBAY, EEFT, EQR, EW, EXAC, FE, FOE, FSP, FTI, FTNT, HAWK, HIW, HLS, HUBG, IRBT, ISIL, JBSS, JBT, KLAC, MKTO, MRCY, MTSI, MWA, NANO, NCR, NUVA, O, PEI, PNRA, PSA, PSB, RHI, RMD, RNR, SKT, SLCA, T, TEX, TMK, TSS, TWTR, TX, ULTI, VNTV, WNC, WRB, X, ZIXI
Fri, Feb. 19, 12:25 PM
- Lam Research (LRCX +4%), KLA-Tencor (KLAC +2.2%), ASML (ASML +2.6%), Axcelis (ACLS +3.9%), Rudolph Technology (RTEC +2.3%) and Xcerra (XCRA +4.9%) have caught sympathy bids after chip equipment giant Applied Materials (AMAT +9.4%) slightly beat FQ1 estimates and (more importantly) issued strong FQ2 guidance. The Nasdaq is up 0.3%.
- Applied's numbers come after Lam and ASML forecast demand would pick up in calendar Q2 following a soft Q1. On its earnings call (transcript), Applied forecast the wafer fab equipment (WFE) market would be roughly flat in 2016 - Gartner forecast a 2.5% drop in January, followed by 8.1% growth in 2017 and 9.1% growth in 2018.
- 2016 outlook: NAND flash equipment spend is expected to be up ~25% Y/Y in 2016 thanks to 3D NAND investments; DRAM spend is expected to drop ~20%, and logic spend be roughly flat. CFO Robert Halliday: "We do believe that the first half is a little bit more weighted to NAND, whereas the second half is more weighted to stronger performance in foundry, logic and DRAM. So we do see a stronger second half." Applied expects to gain WFE share in 2016, aided by strong 3D NAND and 10nm process positions.
- Orders: Not surprisingly (given soft near-term demand), Applied's chip equipment orders fell in FQ1, dropping 11% Y/Y to $1.28B. However, services orders rose 12% to $773M, and display orders (boosted by OLED equipment demand) rose 71% to $183M. Energy/environmental (solar) orders fell 12% to $44M. (earnings release)
- Needham's Edwin Mok has upgraded Applied to Buy, with a $22 target. "We believe AMAT's strategy and efforts to drive growth in the Silicon, Display and [global services] businesses are finally starting to yield results, even with limited industry growth ahead. With improving gross margins and good cost control ahead, we now expect the model to deliver strong, double-digit-% earnings growth in 2-3 years, even though it is trading largely in line with other large-cap Semi names."
- Update: In other news, Lam Research and KLA-Tencor shareholders have each approved the companies' planned merger. The deal is still expected to close in mid-2016.
Thu, Feb. 4, 5:10 PM
- KLA-Tencor (NASDAQ:KLAC) declares $0.52/share quarterly dividend, in line with previous.
- Forward yield 3.11%
- Payable March 1; for shareholders of record Feb. 16; ex-div Feb. 11.
Thu, Jan. 28, 4:19 PM
- KLA-Tencor (NASDAQ:KLAC): FQ2 EPS of $1.04 beats by $0.19.
- Revenue of $710.25M (+5.0% Y/Y) beats by $10.53M.
KLA-Tencor Corp. engages in the design, manufacture, and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. Its products include manufactured chips, wafers, reticles, data storage media,(light-emitting diode) LED, and... More
Industry: Semiconductor Equipment & Materials
Country: United States