Applied Materials (NASDAQ:AMAT) Shares Gap Down After Analyst Downgrade

Key Points

• Applied Materials' share price dropped significantly after Wells Fargo & Company reduced its price target from $215.00 to $205.00, causing the stock to open at $162.70 after closing at $188.24.
• Several analysts downgraded their ratings on the stock, with Rothschild & Co Redburn changing from "buy" to "neutral" and setting a target of $200.00, while the consensus rating remains a "Moderate Buy" with an average target of $196.84.
• Applied Materials declared a quarterly dividend of $0.46 per share, with a yield of 1.1%, to be paid on September 11th, indicating a 22.38% payout ratio.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report)'s share price gapped down prior to trading on Friday after Wells Fargo & Company lowered their price target on the stock from $215.00 to $205.00. The stock had previously closed at $188.24, but opened at $162.70. Wells Fargo & Company currently has an overweight rating on the stock. Applied Materials shares last traded at $166.28, with a volume of 9,538,992 shares changing hands.

Several other research analysts also recently issued reports on the stock. Rothschild & Co Redburn downgraded shares of Applied Materials from a "buy" rating to a "neutral" rating and set a $200.00 price target on the stock. in a research report on Monday, July 7th. TD Cowen lowered their target price on Applied Materials from $220.00 to $200.00 and set a "buy" rating for the company in a research note on Friday. Cantor Fitzgerald lowered their target price on Applied Materials from $220.00 to $200.00 and set an "overweight" rating for the company in a research note on Friday. Morgan Stanley upped their target price on shares of Applied Materials from $169.00 to $172.00 and gave the company an "equal weight" rating in a research report on Friday. Finally, Stifel Nicolaus cut their target price on shares of Applied Materials from $195.00 to $180.00 and set a "buy" rating on the stock in a research report on Friday. One analyst has rated the stock with a sell rating, eleven have assigned a hold rating and seventeen have assigned a buy rating to the stock. Based on data from MarketBeat, Applied Materials has a consensus rating of "Moderate Buy" and an average price target of $196.84.

Insider Buying and Selling

In other Applied Materials news, CAO Adam Sanders sold 562 shares of the firm's stock in a transaction that occurred on Tuesday, June 24th. The shares were sold at an average price of $178.60, for a total transaction of $100,373.20. Following the sale, the chief accounting officer directly owned 5,300 shares in the company, valued at approximately $946,580. This trade represents a 9.59% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. Company insiders own 0.24% of the company's stock.

Institutional Trading of Applied Materials

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. EdgePoint Investment Group Inc. raised its holdings in shares of Applied Materials by 3.6% in the second quarter. EdgePoint Investment Group Inc. now owns 4,991,467 shares of the manufacturing equipment provider's stock valued at $913,788,000 after purchasing an additional 172,563 shares during the last quarter. Benjamin Edwards Inc. grew its stake in shares of Applied Materials by 79.9% in the second quarter. Benjamin Edwards Inc. now owns 38,688 shares of the manufacturing equipment provider's stock valued at $7,083,000 after buying an additional 17,179 shares in the last quarter. BI Asset Management Fondsmaeglerselskab A S grew its stake in shares of Applied Materials by 64.2% in the second quarter. BI Asset Management Fondsmaeglerselskab A S now owns 506,215 shares of the manufacturing equipment provider's stock valued at $89,163,000 after buying an additional 198,002 shares in the last quarter. Brevan Howard Capital Management LP grew its stake in shares of Applied Materials by 61.5% in the second quarter. Brevan Howard Capital Management LP now owns 90,180 shares of the manufacturing equipment provider's stock valued at $16,509,000 after buying an additional 34,348 shares in the last quarter. Finally, Adage Capital Partners GP L.L.C. grew its stake in shares of Applied Materials by 1.0% in the second quarter. Adage Capital Partners GP L.L.C. now owns 806,126 shares of the manufacturing equipment provider's stock valued at $147,577,000 after buying an additional 8,000 shares in the last quarter. 80.56% of the stock is currently owned by institutional investors and hedge funds.

Applied Materials Stock Down 11.8%

The company has a debt-to-equity ratio of 0.29, a current ratio of 2.46 and a quick ratio of 1.76. The firm's 50 day moving average is $184.28 and its two-hundred day moving average is $166.78. The firm has a market capitalization of $133.19 billion, a P/E ratio of 20.23, a PEG ratio of 2.12 and a beta of 1.70.

Applied Materials (NASDAQ:AMAT - Get Free Report) last released its earnings results on Thursday, August 14th. The manufacturing equipment provider reported $2.48 earnings per share for the quarter, beating the consensus estimate of $2.36 by $0.12. Applied Materials had a net margin of 24.06% and a return on equity of 40.15%. The business had revenue of $7.30 billion during the quarter, compared to analysts' expectations of $7.21 billion. During the same period last year, the business earned $2.12 earnings per share. The firm's revenue was up 7.7% on a year-over-year basis. Research analysts predict that Applied Materials, Inc. will post 9.38 EPS for the current year.

Applied Materials Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 11th. Shareholders of record on Thursday, August 21st will be given a dividend of $0.46 per share. This represents a $1.84 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date of this dividend is Thursday, August 21st. Applied Materials's payout ratio is 22.38%.

Applied Materials Company Profile

Applied Materials, Inc engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits.

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