Bank of America has revised its outlook on KLA Corp. (KLAC, Financial), reducing the price target to $805 from a previous $900, while maintaining a Buy rating on the stock. This adjustment arises from the anticipation of potential tariff impacts on U.S. chip vendors.
Despite this, the bank remains optimistic about the upcoming Q1 earnings for these companies, suggesting that initial predictions may have been conservative. The alteration in demand, partly driven by tariff-related pull-ins, could contribute to this positive outlook.
However, Bank of America has also outlined potential risks that tariffs pose to the semiconductor sector. In scenarios with moderate tariff impositions, the average sales decline could range from 4% to 6%. More severe tariff conditions might result in sales drops of 9% to 12% over the years 2025 and 2026. Correspondingly, earnings per share (EPS) could see a reduction of 12% to 13% under the moderate scenario.
These possibilities have prompted the institution to adjust targets across its semiconductor coverage, acknowledging the growing uncertainties facing the industry. The cautious approach reflects the potential challenges that could affect firm performance in the near future.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for KLA Corp (KLAC, Financial) is $806.47 with a high estimate of $925.00 and a low estimate of $655.00. The average target implies an upside of 19.26% from the current price of $676.21. More detailed estimate data can be found on the KLA Corp (KLAC) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, KLA Corp's (KLAC, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for KLA Corp (KLAC, Financial) in one year is $611.78, suggesting a downside of 9.53% from the current price of $676.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the KLA Corp (KLAC) Summary page.
