5 Huge Analyst Calls: 'Faster Growth' Seen at Trade Desk; Wendy's Slashed

investing.com:

Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: Upgrades for Lam Research and The Trade Desk, and downgrades for Rackspace, Wendy's, and Carvana.

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What happened? On Monday, Stifel upgraded Lam Research (NASDAQ:LRCX) to Buy with a $725 price target.

What’s the full story? Stifel has a bullish outlook on Lam Research, a leading supplier of semiconductor equipment, based on an expected recovery in memory spending in the second half of the year.

The firm argues that Samsung’s third-quarter expansion of capacity in high-bandwidth memory (HBM) DRAM, or dynamic random access memory, will boost the demand for Lam’s products — and especially its conductor etch process, which is used to create the TSVs, or through-silicon via tech, that connect the DRAM dies (i.e. integrated circuits) in an HBM stack.

Stifel notes that Lam has the highest exposure to DRAM among its peers, and that memory accounted for about 60% of Lam’s system revenue in the previous upcycle. Stifel also believes that memory spending reached an unsustainably low level in the second quarter, and that memory prices, profitability and utilization have bottomed out.

The analysts estimate that Lam’s memory revenue in the June quarter will be down 78% year over year, and will amount to only a fraction of the company's historical average. Stifel does expect that memory spending will normalize from here, meaning that technology investments and roadmaps should then resume and that installed-base cannibalization should stop.

Stifel projects that even modest activity from Samsung (KS:005930), and other players like ChangXin Memory