Lam Research Shares Slide 1.7% Amid Analyst Upgrades and Earnings Beat
Lam Research Corporation (NASDAQ: LRCX) experienced a decline of 1.7% in its share price on Thursday, reaching a low of $160.19 before closing at $162.19. The trading volume for the day was 9,593,920 shares, representing a significant drop of 19% from the average session volume of 11,863,777 shares. This decline followed a previous closing price of $165.05, raising questions among investors regarding the stock’s performance.
Analyst Upgrades Amid Mixed Market Sentiment
Despite the recent drop, Lam Research has attracted attention from several analysts. Citigroup recently revised its price target for the company from $120.00 to $175.00, assigning a “buy” rating in a report dated October 23, 2023. Similarly, Raymond James Financial increased its target from $90.00 to $110.00, also giving the stock an “outperform” rating on July 31, 2023.
In another notable upgrade, Evercore ISI raised its price objective from $115.00 to $170.00, maintaining an “outperform” rating. Meanwhile, HSBC Global Research set a target price of $127.00 and recommended a “hold” rating on September 30, 2023. Overall, one analyst has rated the stock as a Strong Buy, while twenty-six others have rated it as a Buy, and nine have issued Hold ratings. According to data from MarketBeat, Lam Research holds an average rating of “Moderate Buy” with a consensus target price of $148.54.
Strong Earnings Report and Future Guidance
On October 22, 2023, Lam Research announced its latest earnings results, reporting a quarterly earnings per share (EPS) of $1.26, which exceeded the consensus estimate of $1.22 by $0.04. The firm’s revenue for the quarter reached $5.32 billion, surpassing analysts’ expectations of $5.23 billion. This represented a remarkable 27.7% increase in revenue compared to the same quarter in the previous year, during which the company posted an EPS of $0.86.
For the upcoming second quarter of 2026, Lam Research has set its EPS guidance between $1.050 and $1.250. Analysts project that the company will achieve an EPS of $3.71 for the current fiscal year, reflecting a solid outlook amid market fluctuations.
In addition to its earnings performance, Lam Research also announced a quarterly dividend of $0.26 per share, to be distributed on January 7, 2024. Investors of record as of December 3, 2023, will be eligible for this dividend, which translates to an annualized payout of $1.04 and a yield of 0.7%. The company’s current dividend payout ratio stands at 22.91%.
Insider Trading Activity
Recent insider transactions have drawn attention as well. On October 13, 2023, Senior Vice President Vahid Vahedi sold 52,190 shares at an average price of $138.90, totaling approximately $7.25 million. Following this transaction, Vahedi retained ownership of 251,047 shares, worth about $34.87 million, reflecting a 17.21% reduction in their stake.
Additionally, insider Ava Harter sold 9,010 shares on October 27, 2023, at an average price of $157.47, amounting to roughly $1.42 million. After this sale, Harter owned 56,786 shares valued at approximately $8.94 million, marking a 13.69% decrease in their position. Over the past three months, insiders have sold a total of 62,498 shares valued at around $8.88 million. Currently, corporate insiders own approximately 0.31% of Lam Research.
Institutional Investor Movements
Lam Research has seen considerable activity from institutional investors recently. Vanguard Group Inc. raised its holdings by 0.3% in the third quarter, now owning 130,974,214 shares valued at $17.54 billion after acquiring an additional 364,949 shares. State Street Corp also increased its stake by 1.1%, owning 59,551,547 shares valued at $5.81 billion after purchasing an additional 629,666 shares.
JPMorgan Chase & Co. boosted its holdings by 14.4%, now owning 40,622,437 shares valued at $3.95 billion following a recent acquisition of 5,102,589 shares. Geode Capital Management LLC increased its position by 3.5% during the same period, now owning 33,802,736 shares worth approximately $3.28 billion. Institutional investors collectively hold 84.61% of Lam Research’s stock, indicating strong confidence in the company’s long-term prospects.
About Lam Research Corporation
Lam Research Corporation specializes in the design, manufacture, marketing, refurbishment, and servicing of semiconductor processing equipment used in the fabrication of integrated circuits. The company offers a range of products including ALTUS systems for depositing films, SABRE electrochemical deposition products, SOLA ultraviolet thermal processing products, and VECTOR plasma-enhanced CVD ALD products.
As Lam Research continues to navigate the complexities of the semiconductor market, its recent performance and the insights from analysts and investors highlight an evolving landscape that may present both challenges and opportunities.
