Lam Research Corporation (NASDAQ: LRCX) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company was the center of a key analyst upgrade. Today, we’ll talk about the upgrade, what we’re seeing from the stock, and what we’ll be watching for with regard to LRCX ahead.
LRCX Gains Big On Upgrade
As mentioned above, Lam Research is having an overwhelmingly positive day in the market after being the center of a key upgrade. Yesterday, Susquehanna International upgraded the stock.
The investment research firm raised the rating on LRCX from Neutral to Strong Positive. At the same time, the price target on the stock was raisfed by 25% from $200 to $250.
The analyst that increased the rating on LRCX was Mehdi Hosseini. Ultimately, he remains positive with regard to the strength of memory spending. The analyst pointed to increasing memory spending driven by cloud computing, big data, mobile devices and IoT, as reasons to be excited about Lam Research. With memory spending accounting for about 60% of shipments at LRCX, the analyst expects that both revenue and earnings will grow in the near future.
In fact, Hosseini said that he expects for LCRX revenue to grow by at least 5% in the period from 2017 to 2020. This, he says will be coupled with operating leverage and buybacks, which could drive earnings upward by more than 10% in the same period.
What We’re Seeing From The Stock
As investors, one of the first things that we learn is that the news moves the market. In this particular case, news of an upgrade by a highly credible analyst is leading to excitement surrounding Lam Research Corporation. As a result, we’re seeing strong gains in the value of the stock. Currently (11:38), LRCX is trading at $201.40 per share after a gain of $11.01 per share or 5.79% thus far today.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on LRCX. In particular, we’re interested in following the continued growth in memory spending and watching as this improves the fundamentals surrounding the company. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!