Citigroup Keeps Buy Rating on Applied Materials, Lowers PT to $205.

Citigroup Keeps Buy Rating on Applied Materials, Lowers PT to $205.

Citigroup has maintained its Buy rating on Applied Materials (NASDAQ: AMAT) but has lowered its price target to $205 from $220. The semiconductor equipment maker, currently valued at $151 billion, continues to face headwinds, particularly from slower revenue in China and challenges with leading-edge foundry and logic revenues [1].

The latest developments follow Applied Materials' July quarter results and October quarter guidance, which were weaker than expected. The company reported in-line results for the July quarter but guided for October quarter revenue of $6.7 billion, below the consensus estimate of $7.32 billion [1]. The slowdown in China and Gate-All-Around (GAA) technology ramp accounted for a significant portion of the shortfall, partially offset by better performance in other regions.

Despite these near-term challenges, Citigroup highlights Applied Materials' strong fundamentals, including a 48% gross margin and 36% return on equity. The company's position as the leading global semiconductor capital equipment supplier, with a significant exposure to AI and High Bandwidth Memory (HBM) technologies, remains a key factor in its favor [1].

Goldman Sachs, another major investment bank, has reiterated its Buy rating and price target of $215.00, acknowledging the near-term pullback in the stock but maintaining confidence in the company's long-term prospects [2]. The investment bank cited the company's strong fundamentals, including a robust gross profit margin of 48.14% and revenue of $28.09 billion in the last twelve months.

However, several other analyst firms have adjusted their price targets and ratings in response to Applied Materials' mixed financial results. Mizuho lowered its price target to $200, Needham maintained a Buy rating with a $240 price target, and Wolfe Research adjusted its price target to $200 while keeping an Outperform rating [1]. These developments reflect a range of analyst perspectives on the company's financial health and future potential.

In conclusion, while Applied Materials faces near-term challenges, its strong fundamentals and market position continue to be supported by major investment banks. Investors should monitor the company's progress and adjust their strategies accordingly.

References:
[1] https://www.investing.com/news/analyst-ratings/applied-materials-stock-price-target-lowered-by-mizuho-to-200-on-china-weakness-93CH-4195135
[2] https://www.investing.com/news/analyst-ratings/applied-materials-stock-faces-headwinds-as-goldman-reiterates-buy-rating-93CH-4194777