Lam Research slips on weak Q3, analysts cuts PTs, but strong demand keeps them positive
Aguus/E+ via Getty Images

Lam Research (NASDAQ:LRCX) shares slipped on Thursday after the semiconductor equipment maker reported third-quarter results that missed estimates, prompting several Wall Street analysts to cut their price targets, but analysts remained positive as they believe the second-half of the year will be much better than the first.
Morgan Stanley analyst Jospeh Moore lowered his price target to $625 from $730, but kept the firm's overweight rating, noting that there is still a "good setup for the stock here with high [second-half] backlog alleviating many of the concerns holding the multiple back."
Lam Research (LRCX) shares fell 0.5% to $479 in premarket trading on Thursday.
Moore noted that demand for Lam Research (LRCX) products is still strong, at least for now, helping eschew any worries about supply chain issues. 
"Our checks show that, and the $600 [million] increase in deferred revenue at Lam in the March quarter also validates that, and the company reiterating $100 [billion] [wafer fab equipment] in 2022 validates that (and they characterized that number as supply constrained)," Moore wrote in a note to clients. 
The analyst added that it's likely that deferred revenue rises in the upcoming quarter, but it's likely that it will turn into actual revenue in the second half of the year. 
Bank of America analyst Vivek Arya also lowered the firm's price target, going to $650 from $690, but also reiterated that demand is still solid.
"While we agree [wafer fab equipment] demand is strong (bottoms up capex +30% YoY in 2022) we have less visibility into the ability for supply to snap back and support $100 [billion] or more in 2022 [wafer fab equipment]." 
On Wednesday, Lam Research (LRCX) said it earned an adjusted $7.40 per share on $4.06 billion in revenue, compared to estimates of $7.51 per share and $4.24 billion.
For the upcoming quarter, the company said it expects revenue to be $4.2 billion, plus or minus $300 million, compared to estimates of $4.45 billion. It also expects gross margin to be 44.5%, operating margins of 29.5% and earnings per share to be between $6.50 and $8 per share.
Earlier this month, investment firm Citi added Lam Research (LRCX) to its U.S. Focus List, noting that the stock should benefit from positive news flow on NAND memory.