After a big rally in KLA’s stock price, Susquehanna said investors can find better opportunities elsewhere.
On Monday, analyst Mehdi Hosseini lowered his rating for
KLA
shares to Neutral from Positive. He raised his price target to $675 from $640.
The best-case scenario is now anchoring his KLA earnings forecasts, he said. “The current valuation leaves us with no choice but to downgrade the shares of KLAC.”
KLA shares had fallen 0.5% to $596.64 Monday afternoon. The
Nasdaq Composite
was up 0.3%.
The company is a leading maker of chip manufacturing equipment and counts
Taiwan Semiconductor Manufacturing
and
Samsung Electronics
as large customers.
The analyst said his current estimate for KLA’s calendar year 2025 earnings-per-share of roughly $34 already reflects a steep recovery for the company. He noted his new price target is 20 times his 2025 EPS forecast, which is above KLA’s 10-year average valuation of 16 times.
“We see minimal upside to our estimates,” he wrote.
KLA stock is up 49% over the past 12 months, compared with a 46% rise for the
iShares Semiconductor ETF.
Write to Tae Kim at tae.kim@barrons.com
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