Evercore analyst C.J. Muse’s cautious note about Lam Research Corp. prompted a sell-off in shares of Lam, Applied Materials Inc. , KLA-Tencor Corp. and other semiconductor-equipment names last week, and on Wednesday Muse weighed in with an update. “While we do see a near-term pause for LRCX, we see no risk to consensus estimates for peers AMAT, ASML , and KLAC,” he wrote. “With AMAT underperforming the S&P 500 by 300bps and KLAC ~400bps, we [view] the sell-off as a clear buying opportunity.” In all caps, he added, “WE WOULD BE ADDING AMAT SHARES TODAY, in particular.” Shares were up 0.9% in midday trading Wednesday. Muse was relatively upbeat about shares of Lam Research as well, writing that he sees upside potential relative to consensus earnings estimates for the next calendar year. “We think downside risk from here is quite limited,” he said, adidng that “for investors with 3+mos time horizon, now is the time to start adding.” Muse has buy ratings on shares of Lam Research, Applied Materials, and ASML. Lam shares are down 5.6% so far this month, while the S&P 500 has gained 3.1% and the PHLX Semiconductor Index has risen 3.3%.
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