Lam Research (NASDAQ:LRCX) Shares Climb 8.2% After Dividend Announcement

Key Points

• Lam Research shares surged 8.2% to $200.44, with trading volume 64% above its daily average, after the company announced capital returns to shareholders.
• The company declared a quarterly dividend of $0.33 per share—$1.32 annualized, yielding about 0.7%—and authorized up to $25 billion in share repurchases, or roughly 9% of outstanding shares.
• Analysts maintain a “Moderate Buy” consensus, with an average price target of $360.23; the company’s latest quarterly results also beat earnings and revenue estimates, with revenue up 54.4% year over year.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report)'s share price shot up 8.2% during trading on Friday after the company announced a dividend. The company traded as high as $209.20 and last traded at $200.44. 17,897,957 shares were traded during mid-day trading, an increase of 64% from the average daily volume of 10,924,982 shares. The stock had previously closed at $185.20.The newly announced dividend which will be paid on Wednesday, January 6th. Investors of record on Wednesday, December 2nd will be issued a dividend of $0.33 per share. This represents a $1.32 annualized dividend and a yield of 0.7%. The ex-dividend date of this dividend is Wednesday, December 2nd. Lam Research's dividend payout ratio (DPR) is 19.67%.

Wall Street Analyst Weigh In

LRCX has been the subject of a number of recent analyst reports. Evercore set a $315.00 price objective on shares of Lam Research in a report on Tuesday, October 20th. UBS Group reiterated a "buy" rating and issued a $400.00 price objective (down from $425.00) on shares of Lam Research in a research report on Thursday, October 22nd. Citigroup reissued a "buy" rating and set a $435.00 target price (down from $450.00) on shares of Lam Research in a research note on Thursday, October 22nd. Weiss Ratings cut Lam Research from a "buy (b)" rating to a "buy (b-)" rating in a research report on Friday, September 4th. Finally, B. Riley Financial raised their target price on Lam Research from $350.00 to $390.00 and gave the company a "buy" rating in a research report on Thursday, October 1st. Twenty-six equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $360.23.

Lam Research Stock Performance

The company has a current ratio of 2.48, a quick ratio of 1.86 and a debt-to-equity ratio of 0.27. The firm's fifty day moving average is $286.73 and its 200 day moving average is $283.78. The company has a market cap of $250.38 billion, a PE ratio of 29.87, a price-to-earnings-growth ratio of 0.82 and a beta of 1.97.

Lam Research (NASDAQ:LRCX - Get Free Report) last posted its quarterly earnings data on Wednesday, October 21st. The semiconductor company reported $2.20 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.18 by $0.02. Lam Research had a net margin of 32.34% and a return on equity of 72.15%. The business had revenue of $8.22 billion for the quarter, compared to the consensus estimate of $8.14 billion. During the same period last year, the firm posted $1.26 earnings per share. The company's revenue was up 54.4% compared to the same quarter last year. As a group, research analysts predict that Lam Research Corporation will post 9.59 EPS for the current fiscal year.

More Lam Research News

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

• Positive Sentiment: The board authorized up to $25 billion in share repurchases, equivalent to as much as 9% of outstanding shares. Buybacks can support earnings per share and signal management sees value in the stock, although the authorization does not guarantee that all shares will be repurchased. Lam Research announcement
• Positive Sentiment: Lam also declared a quarterly dividend of $0.33 per share, payable January 6 to shareholders of record December 2. Share repurchase and dividend announcement
• Neutral Sentiment: The rally may also draw attention to LRCX’s substantial presence in semiconductor, technology, and Nasdaq-100 funds. Overlapping fund holdings can magnify investors’ exposure to the stock in either direction. ETF exposure article
• Negative Sentiment: Risks persist after a severe chip-stock selloff. Coverage points to uncertainty around regulation, profit-taking, and a possible slowdown in capital spending; weaker equipment investment could weigh on Lam’s business. Semiconductor selloff analysis

Lam Research declared that its board has authorized a stock repurchase program on Thursday, November 5th that authorizes the company to repurchase $25 billion in outstanding shares. This buyback authorization authorizes the semiconductor company to reacquire up to 9% of its stock through open market purchases. Stock buyback programs are typically a sign that the company's management believes its stock is undervalued.

Insider Transactions at Lam Research

In other Lam Research news, insider Ava Harter sold 5,000 shares of the business's stock in a transaction that occurred on Monday, August 31st. The stock was sold at an average price of $302.46, for a total transaction of $1,512,300.00. Following the completion of the sale, the insider directly owned 42,462 shares in the company, valued at approximately $12,843,056.52. The trade was a 10.53% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bethany Mayer sold 9,557 shares of the stock in a transaction that occurred on Wednesday, September 9th. The shares were sold at an average price of $314.74, for a total value of $3,007,970.18. Following the transaction, the director directly owned 20,995 shares of the company's stock, valued at $6,607,966.30. The trade was a 31.28% decrease in their position. The SEC filing for this sale provides additional information. Company insiders own 0.31% of the company's stock.

Institutional Trading of Lam Research

Several large investors have recently made changes to their positions in the company. World Equity Group Inc. boosted its holdings in shares of Lam Research by 0.5% during the second quarter. World Equity Group Inc. now owns 5,576 shares of the semiconductor company's stock worth $2,416,000 after purchasing an additional 29 shares during the period. Vann Equity Management LLC grew its position in Lam Research by 1.1% during the third quarter. Vann Equity Management LLC now owns 2,873 shares of the semiconductor company's stock valued at $944,000 after purchasing an additional 31 shares in the last quarter. Tenzing Financial LLC increased its stake in Lam Research by 3.5% in the 2nd quarter. Tenzing Financial LLC now owns 1,018 shares of the semiconductor company's stock valued at $441,000 after buying an additional 34 shares during the period. Advus Financial Partners LLC increased its stake in Lam Research by 1.0% in the 2nd quarter. Advus Financial Partners LLC now owns 3,578 shares of the semiconductor company's stock valued at $1,550,000 after buying an additional 34 shares during the period. Finally, Paragon Private Wealth Management LLC increased its stake in Lam Research by 1.3% in the 2nd quarter. Paragon Private Wealth Management LLC now owns 2,719 shares of the semiconductor company's stock valued at $1,178,000 after buying an additional 35 shares during the period. 84.61% of the stock is currently owned by hedge funds and other institutional investors.

About Lam Research

Lam Research is a global supplier of equipment and services used to manufacture semiconductors. Its products help chipmakers create and process the microscopic structures that form integrated circuits.

The company's wafer fabrication equipment is used for processes including etch, thin-film deposition and wafer cleaning. Lam also provides services such as equipment maintenance, upgrades, spare parts and other support for chip manufacturing operations.

Founded in 1980 and headquartered in Fremont, California, Lam Research serves semiconductor manufacturers around the world.

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