Applied Materials May Gain 17% During the Next Year

Experts recommend Applied Materials as one of the strong-buys in 2020. This company is semi-conductor, and its valuation is $61 billion presently. Applied Materials produces integrated circuit chips for various electronics.

Deutsche bank’s analyst Sidney Ho stated that the company seems well-positioned for strong earnings in the coming year, with its expectations for continued share gains and early signs of memory recovery. Applied Materials highly benefit from a robust foundry/logic environment, and Ho expects that the stock’s rally will continue throughout 2020.

Some experts estimate that the stock may lose $300 million due to the coronavirus outbreak. But the long-term prognosis is still very strong even if the stock loses some income due to the virus.

According to Ho, the risk-reward for Applied Materials is favorable, as it trades at 12x versus its large-cap peers at 1415x. The analyst decided to raise his price target for this stock from the previous $72 to $75. If the target is met, the possible upside will be 15% for the investors.

Wall Street’s experts have also dubbed Applied Materials as a strong buy. According to them, if the average price target is $75.71, the shareholders will gain 17% over the next year.

How did the stock perform during the last months?

Applied Materials surged forward last year. The stock began this year with a 9% rise from January until now. It also gained 90% during 2019. In addition, the company’s latest earnings results also showed a strong quarter and guidance.

At $0.98, earnings per share surpassed the high end of the company’s $0.87-0.95 guidance, as well as Wall Street’s call for $0.93. The first-quarter revenue was $4.16 billion in 2020. Which indicated an 11% increase during the last quarter. This data has beaten the Wall Street experts’ estimation of $4.11 billion.

Experts believe that while the company continues to rally due to its robust foundry/logic business, it will experience a “strong double-digit” growth this year.