Initial Buy Recommendation: 25 March 2022

Current Status: SELL

Notes:

  • 10 May 2022

    • Moved to SELL

      • Despite solid fundamentals and a global macro environment that is conducive to the sector, a breakdown of the structure and general market turbulence has pushed us to downgrade the stock to a SELL. For those that acted on the risky buy recommendation, we feel it is best to weigh on the side of caution and cut losses here as there is no clear picture as to where could find support.

  • 9 April 2022

    • Moved to HOLD.

      • We have downgraded the stock from HOLD / RISKY BUY to HOLD. Current market conditions and the price structure of Applied Materials leave us less inclined to take on more risk and to engage in a more cautious and patient approach.

      • Price action has required a more cautious approach. We recommend waiting for the price to climb above the $133 buy zone before putting any further capital at risk. That being said, we feel the company is financially sound and the technical picture still looks good given the turmoil we’ve seen in US markets. For those looking to be more risk-tolerant, we believe a buy here has a high probability of paying off and adding an extra 10% to the total expected return.

OVERVIEW:

  • Exchange: NASDAQ

  • Ticker: AMAT

  • Sector: Producer Manufacturing, Industrial Machinery

COMPANY DESCRIPTION:

Applied Materials, Inc. is an American corporation that supplies equipment, services and software for the manufacture of semiconductor (integrated circuit) chips for electronics, flat panel displays for computers, smartphones, televisions, and solar products. Integral to the growth of Silicon Valley, the company also supplies equipment to produce coatings for flexible electronics, packaging and other applications. The company is headquartered in Santa Clara, California.

FINANCIAL OVERVIEW:

  • Market Cap - $105.97 billion

  • P/E Ratio - 17.03

  • Dividend Yield - 0.87%

  • Return-On-Equity (5 year avg %) - 12.15%

  • Interest Coverage - 34.07

  • Net Income Growth Rate (5 year avg %) - 34.70%

  • Earnings Per Share (5 year avg %) - 39.62%

  • Current Ratio - 2.54

  • Revenue Growth Rate (5 year avg %) - 17.69%

RECOMMENDATION:

  • Buy Range - $133.32 - $145.77

  • Profit Target - $209.10 (approx 49.84% ROI)

  • Stop Loss - $119.83

CHART: