Goldman Upgrade Should Propel One of My Favorite Semi Stocks Higher

by Sam Collins | October 25, 2013 1:45 am

Lam Research (LRCX[1]) — This is one of the leading manufacturers of etch products, used to etch away portions of films to create integrated circuits (IC).

On Oct. 3, with the stock trading near $51.40, I said: “This large-cap chip company is expected to see sales increase 22% in fiscal 2014, ended in June, helped by the acquisition of Novellus. And analysts look for another 7% increase in fiscal 2015. Earnings are estimated at $3.83 per share in fiscal 2014 and $4.48 in fiscal 2015.

“Last week, LRCX broke from a quadruple-top at $51 on a sharp volume spike. The trading target is $57, but investors could also buy LRCX for long-term appreciation.”

On Thursday, Goldman Sachs (GS[2]) upgraded the stock from “neutral” to “buy,” noting: “With the memory cycle and margins now going in the right direction, we are confident Street estimates can begin to move higher in 2014.” Goldman’s price target was raised from $45 to $64.

LRCX spiked more than 6% to $55.47 on the day and closed up 1.5% at $53. I suggest a buy under price of $52, and I’m raising my trading target to $60.

LCRX Chart
Click to Enlarge

Chart Key[3]

  1. LRCX:
  2. GS:
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