Lam Research upgraded to Buy on improved WFE spending view at Goldman Sachs
Goldman Sachs analyst Toshiya Hari upgraded Lam Research (LRCX) to Buy from Neutral, citing his belief that meaningful capex cuts and production adjustments from memory chip makers, coupled with recent supply-side disruptions, will result in an improvement in memory supply/demand sooner than previously expected and drive higher levels of Wafer Fab Equipment spending in 2020. The analyst, who now forecasts the WFE market to grow 7% -year-over-year in 2020 compared to his prior assumption of it being flat, still noted he sees downside to Street estimates for the second half and for calendar year 2020. Hari, who raised his 2020 WFE assumptions in both NAND and DRAM, increased his price target on Lam shares to $231 from $197. Hari also upgraded Applied Materials (AMAT) to Conviction Buy from Neutral and raised his rating on KLA-Tencor (KLAC) to Neutral from Sell, citing similar grounds.