Bank of America has adjusted its price target for Lam Research (LRCX, Financial), reducing it from $110 to $90, while maintaining a Buy rating on the stock. The firm anticipates that U.S. chip companies, including Lam Research, will post strong first-quarter results due to originally conservative forecasts and demand driven by tariff-related pull-ins.
Despite the optimistic short-term outlook, Bank of America warns of potential risks related to tariffs. In scenarios where tariffs are modest, a sales hit of 4% to 6% could be expected on average across the industry. In more severe circumstances, tariffs could lead to a significant drop in sales, with potential declines of 9% in 2025 and 12% in 2026.
Regarding earnings per share (EPS), modest tariffs could result in declines of 12% to 13%. To reflect these uncertainties, Bank of America has lowered targets across its semiconductor coverage.
