AMAT

Applied Materials Inc

TMT


Presented:03/20/2018
Price:$59.23
Cap:$63.44B
Current Price:$191.02
Cap:$157.48B

Presented

Date03/20/2018
Price$59.23
Market Cap$63.44B
Ent Value$59.03B
P/E Ratio22.35x
Book Value$8.10
Div Yield0.68%
Shares O/S1,071.00M
Ave Daily Vol14,213,826
Short Int1.02%

Current

Price$191.02
Market Cap$157.48B
Applied Materials, Inc. engages in the provision of materials engineering solutions used to produce new chip and advanced display. It operates through the following segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment includes semiconductor capital equipment for deposition, etch, ion implantation, rapid thermal processing, chemical mechanical planarization, metrology and inspection, and wafer level packaging. The Applied Global Services segment provides solutions to optimize equipment, performance, and productivity. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays, organic light-emitting diodes; coating systems and display technologies for television; personal computers, tablets, smart phones, and consumer-oriented devices. The company was founded on November 10, 1967 and is headquartered in Santa Clara, CA.

Publicly traded companies mentioned herein: Applied Materials Inc (AMAT), Lam Research (LRCX)

Highlights

Based on the presenter’s secular growth thesis and belief in a third wave of technology development/advancement, driven by Artificial Intelligence (AI) and Big Data, shares of Applied Materials (AMAT) are attractively valued at $59 - $60 (13x forward Street estimate). Over the next three years, if AMAT can grow revenue at a low teens (%) rate, the EPS CAGR could be in the 20% - 25% range. The end result, including the positive impact of capital deployment, could be $6/share of earnings in 2020 and $17B of FCF generated (over the three year period). At 13x this estimate, the presenter thinks $78 is a fair, if not conservative, price objective looking out 12 - 18 months.

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Idea Discussion

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