JP Morgan Downgrades Applied Materials to "Underweight" (AMAT)

JP Morgan Downgrades Applied Materials to “Underweight” (AMAT)


After a recent run-up in Applied Materials, Inc. (AMAT) share price, JP Morgan downgraded the semiconductor equipment maker.

The analysts downgraded AMAT from “Neutral” to “Underweight” and maintained its $10 price target. The target is a -15.3% downside to Friday’s closing price of $11.81.

A JP Morgan analysts commented, “We are downgrading our rating and trimming our ests (estimates) for Applied Materials to reflect our continued bearish semi capex outlook. We think the recent run-up in the stock is a near term short opportunity as we think the upcoming earnings season and associated 2013 capex guidance by major semi device makers will be negative for AMAT and the SemiCap sector as a whole. … We think AMAT and other large cap SemiCap stocks are currently disconnected from the deteriorating industry outlook and recommend long only investors trim existing positions or recommend short investors take positions ahead of earnings season.”

Applied Materials shares were down 31 cents, or -2.62%, during morning trading. The stock is +7.27% over the past year.

The Bottom Line
Shares of Applied Materials (AMAT) have a 3.05% dividend yield, based on Friday’s closing stock price of $11.81. The stock has technical support in the $10-$10.50 price area. If the shares can firm up, we see overhead resistance around the $12.50-$13.00 price levels.

Applied Materials, Inc. (AMAT) is not recommended at this time, holding a DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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