Technology

Lam Research and Xilinx See Big Target Hikes From Analysts After Earnings

Jon C. Ogg

Published: January 25, 2018 10:55 am

Last Updated: January 12, 2020 4:06 am

The current barrage of morning analyst calls is in many instances analysts reacting to positive earnings. There also have been many analysts raising targets ahead of many pending earnings announcements. After all, this is a raging bull market, and tax reform and accelerated economic and earnings growth are offering very strong support for higher stock prices.

Thursday’s top analyst calls have seen some downgrades and many upgrades and target price hikes. We also saw 10 tech stocks get heavy price target hikes ahead of earnings, and now there are two semiconductor stocks that were getting multiple analyst upgrades.

Lam Research Corp. (NASDAQ: LRCX) was down 2.5% at $209.73 on Wednesday, but its shares were up 4.4% at $218.90 on Thursday morning after strong earnings and spending forecasts. The company was well above consensus estimates, and it provided a more positive industry outlook for 2018.

Lam Research now has a consensus analyst target price of $246.53, but that consensus target was $231.65 ahead of earnings and it was $226.65 just a month ago.

Credit Suisse has an Outperform rating and a $245 target price, noting that the stock could even rise to $240 in the next three months. The firm believes that investors continue to underestimate the secular growth driven by rising capital intensity and also underestimates Lam Research’s increasing installed base, which has supported 20% compounded annualized growth for services.

Other analyst calls on Lam Research were seen as follows:

• CFRA (S&P) reiterated its Buy rating and raised its target to $240 from $220.
• Deutsche Bank reiterated its Buy rating and raised its target to $240 from $230.
• Instinet reiterated its Buy rating and raised its price target to $250 from $230.
• KeyBanc reiterated its Overweight rating and raised its target from $225 to $261.
• Morgan Stanley reiterated its Overweight rating and raised its target to $238 from $229.
• Needham reiterated its Buy rating and raised its target from $235 to $270.
• Stifel reiterated its Buy rating and raised its target price to $260 from $235.
• Susquehanna reiterated its Positive rating and raised its target to $260 from $250.

Xilinx Inc. (NASDAQ: XLNX) was down 2.7% at $72.33 on Wednesday and its shares were last seen down 1.5% at $72.40 on Thursday morning. The shares were initially higher in the after-hours session after beating earnings estimates and having its ninth straight quarter of revenue growth.

Xilinx now has a consensus analyst target of $72.25, up from a $72.10 consensus target before earnings and $70.25 just a month ago.

Xilinx was reiterated as Outperform and the price target was raised to $85 from $75 at Credit Suisse. The firm sees multiple growth drivers helping Xilinx reach its goals along with higher earnings.

Merrill Lynch maintained its Underperform rating but raised its price objective to $70 from $61, noting that the beat was driven by unsustainable crypto-driven sales.

Other key analyst calls were seen as follows:

• CFRA (S&P) maintained its Hold rating but raised its target price from $70 to $80.
• Deutsche Bank maintained its Hold rating but raised its target to $68 from $65.
• Mizuho reiterated its Buy rating and raised its target price to $74 from $69, talking up the crypto angles.
• Wells Fargo maintained its Market Perform rating and raised its target from $66 to $70.
• SunTrust Robinson Humphrey reiterated its Buy rating and raised its target to $79 from $69.
• Instinet maintained its Hold rating but raised its target price to $60 from $50.