Friday, Credit Suisse upgraded Lam Research Corp. (LRCX) shares to Outperform from Neutral and increased its price target to $41 from $23.
Analyst Kumar said that his key concern was potential margin dilution from the clean business, his pessimism was excessive as solid execution on etch share gains warrant recognition. While greater scrutiny is warranted on supply demand trends in DRAM and foundry utilizations in first half of 2010, LRCX's shipment momentum likely will persist into first quarter of 2010, and should help the stock through the remainder of the year.
The analyst said that LRCX should outgrow industry in 2010. The analyst expects LRCX can outgrow the industry by 1,000bps in 2010 simply because it is not leveraged to Intel, which he thinks will not meaningfully increase its capex, relative to the 30%-35% growth he expects in overall industry capex.
The analyst noted that LRCX is likely to gain share in core accounts. Samsung is building fablines with backend of line metallization that can flex between both DRAM and NAND. The analyst thinks this could depress demand for BEOL, not good for Applied Materials Inc. (AMAT), Tokyo Electron) but leave front end of line demand stable, good for Lam Research Corporation (LRCX), KLA-Tencor Corp. (KLAC).
The analyst said that Lam is very strong at Micron, which is causing share gains at Inotera and Nanya, both of which are shifting process to the Micron flow Upside to estimates. The analyst is modeling shipments to grow 45% year-over-year in calendar 2010, in line with his ex-Intel growth for capex. The analyst is not baking in substantial share gains from the clean business.
Currently, LRCX is up $1.46 or 4.22% and trading at $36.07.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.