Analyst Joseph Quatrochi of Wells Fargo maintained a Hold rating on KLA, retaining the price target of $920.00.
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Joseph Quatrochi has given his Hold rating due to a combination of factors related to KLA’s recent financial performance and market conditions. The company’s revenue from TSMC, a significant client, showed a quarter-over-quarter decline of 23% in the June quarter after two quarters of elevated spending. This decline is seen as part of the normal cycle of leading-edge capacity builds, which tend to be stronger in the first half of the calendar year.
Additionally, KLA’s remaining performance obligations (RPO) have decreased, with next twelve months RPO estimated at $5.8 billion, representing a decline both quarter-over-quarter and year-over-year. While the company’s gross margins in the semiconductor process control segment have improved, the overall financial outlook is tempered by increased inventory purchase commitments and a shift in focus away from backlog as an indicator of future revenue. These mixed signals contribute to the decision to maintain a Hold rating on KLA’s stock.
In another report released on August 1, Barclays also maintained a Hold rating on the stock with a $750.00 price target.