Lam Research CorporationNASDAQ
Still Time To Go Long On Lam Research
Alpha Gen Capital
Alpha Gen Capital
You Can Benefit From Lam's Exposure To Memory
Wed, Oct. 19, 4:07 PM
Tue, Oct. 18, 5:35 PM
Fri, Oct. 7, 8:55 AM
- Following the cancellation of the company's (NASDAQ:KLAC) planned merger with Lam Research and in addition to resulting positive consideration out of B. Riley. & Co. (Buy, $86 target) and Cowen and Company (Outperform, $80 target).
- Needham & Company analyst Edwin Mok: "KLAC is outperforming WFE in CY16 partially due to lower DRAM mix this year, but the stock's multiple saw compression (16x to 13x) due to the deal. We believe expectations for CY17 are low as DRAM mix is likely to recover, but we see strong growth continuing on strengthened foundry demand, ramping of Gen 5 optical inspection tools, growth from other new products, and a leaner operating structure enabling better margins/profitability ahead. While the stock could see near-term pressure on investor churn, we believe it is undervalued at a CY17 P/E of 13x. KLAC historically trades at a premium to peers on structurally higher margins and ROIC, and we expect multiple expansion ahead as it delivers our growth projections."
- Price target on KLA-Tencor set at $84 (current price $71.79). Needham and Company remains positive on Lam Research (NASDAQ:LRCX) as well, restating a Buy rating and raising to a $115 target (current price $100.19).
- KLA-Tencor shares +0.86% pre-market, Lam Research +0.19%.
Thu, Oct. 6, 9:44 AM
- Termination of planned merger disclosed yesterday evening.
- On Lam Research (NASDAQ:LRCX), UBS analyst Stephen Chin reissues a Buy rating and $105 price target (current price $99). While disappointed in the development, notes firm's previous projections fully factored the company's standalone value. Sees a return to robust sales outperformance going forward.
- Lam Research shares are responding significantly (+3.05%) to the merger collapse, while KLA-Tencor (NASDAQ:KLAC) shares are hovering around mostly unchanged levels (+0.25%).
Wed, Oct. 5, 6:20 PM
- Attributed to discontinuation of consent decree by U.S. Department of Justice.
- Both companies to hold respective conference calls tomorrow.
- KLA-Tencor president and CEO Rick Wallace: "Although we are disappointed with this outcome, KLA-Tencor's performance over the past several quarters demonstrates the Company is executing our strategies at a high level and creating compelling value for the industry and for our stockholders."
- Lam Research (NASDAQ:LRCX) president and CEO Martin Anstice: "We believe that this proposed combination would have resulted in compelling benefits for our customers, employees and stockholders, as well as accelerate innovation in the broader semiconductor industry, so we are disappointed with the outcome. However, together with our customers, we have affirmed the value of closer cooperation between process and process control for new enabling solutions, for that reason, we plan to explore collaboration opportunities with KLA-Tencor around programs identified as beneficial to our customers."
- KLA-Tencor (NASDAQ:KLAC) furthermore today raises its dividend from $0.52 to $0.54 per share, effective November.
- Shares in both companies presently stable in extended trading.
- Press release (KLA-Tencor)
- Press release (Lam Research)
Thu, Sep. 1, 4:13 PM
Mon, Aug. 29, 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, 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.
Wed, Jul. 27, 4:08 PM
Tue, Jul. 26, 5:35 PM
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Mon, May 23, 7:00 PM
- Lam Research (NASDAQ:LRCX) has priced $2.4B in debt in connection with its acquisition of KLA-Tencor.
- The company priced $800M in 2.8% senior notes due 2021, $600M in 3.45% senior notes due 2023, and $1B in 3.9% senior notes due 2026.
- Net proceeds will partly finance the cash portion of the company's deal for KLA-Tencor. The sale isn't conditioned on the buyout, but if the acquisition isn't done by Dec. 30, Lam will be required to redeem the 2023 notes and 2026 notes (and will use the 2021 proceeds for general purposes).
- The offering is expected to close June 7. At least report, Lam had total debt of $2.39B and debt/equity of 42%.
- Now read The Market Will Catch Up To Lam Research »
Mon, May 23, 12:39 PM
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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 »
Fri, May 13, 4:11 PM