Applied Materials: Credit Suisse reiterates 'outperform'.

(CercleFinance.com) - Credit Suisse reiterates its "outperform" rating on Applied Materials, before the US supplier of tools for semi-conductor chips reports its quarterly earnings after the market closes on 15 February.


The broker expects the company to at least meet street estimates for the quarter to end-January, and guide above the consensus for its April quarter, thanks to better than expected orders.

While Credit Suisse says stronger-than-expected results could lead to "peak" valuation concerns, the professional's answer is that the semi-conductor industry is now structurally better, benefiting from more growth and being less cyclical.

The broker also underlines that Applied Materials shares are trading at only 13.5x, versus a S&P/Semis average of 17.7x/17.1x; it hence sees potential for multiple expansion to a level in line with the market.

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