Lam Research Target of Unusually High Options Trading (NASDAQ:LRCX)

Key Points

• Unusually heavy put options trading hit Lam Research, with 56,347 puts traded, about 33% above the average, signaling increased hedging or downside concern among traders.
• The stock fell 4.0% to $373.33 in mid-day trading, though it remains near its 12-month high and far above its 50-day and 200-day moving averages.
• Analysts remain mostly bullish on LRCX, with 28 Buy ratings and a consensus price target of $324.26, while recent commentary points to AI-related packaging demand as a possible growth catalyst.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report) saw unusually large options trading activity on Tuesday. Traders acquired 56,347 put options on the stock. This represents an increase of 33% compared to the average volume of 42,252 put options.

Lam Research Trading Down 4.0%

NASDAQ:LRCX traded down $15.59 during mid-day trading on Tuesday, reaching $373.33. 5,752,733 shares of the company's stock traded hands, compared to its average volume of 10,847,049. Lam Research has a 12-month low of $87.75 and a 12-month high of $393.07. The firm has a market capitalization of $466.88 billion, a price-to-earnings ratio of 70.80, a PEG ratio of 3.02 and a beta of 1.85. The company has a debt-to-equity ratio of 0.35, a current ratio of 2.54 and a quick ratio of 1.77. The company has a 50 day moving average price of $289.51 and a 200-day moving average price of $235.83.

Lam Research (NASDAQ:LRCX - Get Free Report) last posted its earnings results on Wednesday, April 22nd. The semiconductor company reported $1.47 earnings per share for the quarter, topping analysts' consensus estimates of $1.36 by $0.11. Lam Research had a return on equity of 66.21% and a net margin of 30.94%.The firm had revenue of $5.84 billion for the quarter, compared to the consensus estimate of $5.70 billion. During the same quarter in the prior year, the business earned $1.04 EPS. The business's revenue for the quarter was up 23.8% on a year-over-year basis. Lam Research has set its Q4 2026 guidance at 1.500-1.800 EPS. On average, sell-side analysts predict that Lam Research will post 5.7 earnings per share for the current year.

Lam Research Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, July 8th. Shareholders of record on Wednesday, June 17th will be issued a dividend of $0.26 per share. The ex-dividend date is Wednesday, June 17th. This represents a $1.04 dividend on an annualized basis and a dividend yield of 0.3%. Lam Research's dividend payout ratio is 19.62%.

Key Stories Impacting Lam Research

Here are the key news stories impacting Lam Research this week:

• Positive Sentiment: Recent coverage says Lam Research stands out on strong demand, with analysts and fund commentary highlighting the company as a long-term growth name benefiting from solid earnings momentum and market-beating potential. Lam Research (LRCX) Stands Out on Strong Demand
• Positive Sentiment: Lam Research’s advanced packaging business is being viewed as a possible catalyst, with AI chip demand expected to boost need for etch and deposition equipment. Lam Research Expects Packaging Growth of 50%: Is It a Hidden Catalyst?
• Positive Sentiment: The broader semiconductor rally is also lifting sentiment across the group, with chip ETFs and several semiconductor stocks making new highs, which can spill over into LRCX. Chips Up 8.8% in One Week: 5 Semiconductor Names Breaking Into New Highs
• Positive Sentiment: Market commentary says Lam Research has rebounded sharply from June lows as lower rates and improved risk appetite support semicap stocks. Buy, Hold, or Sell: Lam Research Rocketed 21% Off Its June Lows as a New Fed Begins. Is LRCX Worthwhile at $366?
• Neutral Sentiment: CNBC’s “Final Trades” segment featured Lam Research as a pick, which can reinforce investor attention but does not by itself change fundamentals. Alphabet, Lam Research And A Financial Stock On CNBC's 'Final Trades'
• Neutral Sentiment: Director Eric Brandt sold 54,500 shares under a pre-arranged 10b5-1 trading plan, a headline that may weigh on sentiment but is not necessarily a negative signal about the business. SEC filing for director share sale
• Negative Sentiment: Unusual options activity showed a jump in put buying, suggesting some traders are hedging against near-term downside in LRCX.

Analysts Set New Price Targets

LRCX has been the subject of several research analyst reports. Jefferies Financial Group lifted their price target on Lam Research from $285.00 to $315.00 and gave the stock a "buy" rating in a research note on Thursday, April 23rd. Barclays reissued an "overweight" rating and issued a $335.00 target price (up from $275.00) on shares of Lam Research in a research note on Thursday, June 11th. Needham & Company LLC reissued a "buy" rating and issued a $300.00 target price on shares of Lam Research in a research note on Thursday, April 23rd. Susquehanna boosted their target price on Lam Research from $350.00 to $385.00 and gave the company a "positive" rating in a research note on Thursday, April 23rd. Finally, Royal Bank Of Canada boosted their target price on Lam Research from $290.00 to $310.00 and gave the company an "outperform" rating in a research note on Thursday, April 23rd. Twenty-eight equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $324.26.

Insider Buying and Selling

In related news, SVP Neil J. Fernandes sold 18,170 shares of the company's stock in a transaction that occurred on Friday, May 1st. The shares were sold at an average price of $255.14, for a total value of $4,635,893.80. Following the transaction, the senior vice president directly owned 66,129 shares in the company, valued at approximately $16,872,153.06. This represents a 21.55% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Ava Harter sold 6,010 shares of Lam Research stock in a transaction dated Monday, April 27th. The stock was sold at an average price of $258.66, for a total value of $1,554,546.60. Following the sale, the insider directly owned 53,205 shares of the company's stock, valued at approximately $13,762,005.30. This trade represents a 10.15% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders have sold 86,339 shares of company stock worth $27,680,267. Insiders own 0.31% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in the company. Militia Capital Management LLC purchased a new position in shares of Lam Research during the 1st quarter worth approximately $218,000. Rathbones Group PLC grew its holdings in shares of Lam Research by 1,013.2% during the 1st quarter. Rathbones Group PLC now owns 73,112 shares of the semiconductor company's stock worth $15,621,000 after acquiring an additional 66,544 shares during the period. Wealthquest Corp boosted its position in shares of Lam Research by 5.3% in the 1st quarter. Wealthquest Corp now owns 4,041 shares of the semiconductor company's stock worth $863,000 after purchasing an additional 205 shares in the last quarter. Parallel Advisors LLC boosted its position in shares of Lam Research by 7.6% in the 1st quarter. Parallel Advisors LLC now owns 20,591 shares of the semiconductor company's stock worth $4,400,000 after purchasing an additional 1,461 shares in the last quarter. Finally, Foguth Wealth Management LLC. bought a new stake in shares of Lam Research in the 1st quarter worth approximately $202,000. Hedge funds and other institutional investors own 84.61% of the company's stock.

Lam Research Company Profile

Lam Research Corporation NASDAQ: LRCX is a global supplier of wafer fabrication equipment and services to the semiconductor industry. Founded in 1980 by David K. Lam and headquartered in Fremont, California, the company develops and manufactures systems used in multiple stages of semiconductor device production, including thin film deposition, plasma etch, wafer cleaning and related process modules and automation.

Lam's product portfolio covers core process technologies employed by logic and memory manufacturers, with equipment designed to support advanced-node patterning, 3D NAND and other emerging device architectures.

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