By Susquehanna, a financial analysis firm, has downgraded its rating for KLA shares, citing better investment opportunities elsewhere. Analyst Mehdi Hosseini revised his rating from Positive to Neutral and increased the price target to $675 from $640.
Hosseini believes that the current valuation of KLA shares makes it difficult to justify a positive outlook. While acknowledging the company’s position as a leading chip manufacturing equipment maker with large customers such as Taiwan Semiconductor Manufacturing and Samsung Electronics, he expresses skepticism about the potential for future growth.
According to Hosseini, his estimate for KLA’s earnings per share in 2025, which stands at approximately $34, already assumes a significant recovery for the company. His new price target of $675 reflects a valuation of 20 times his EPS forecast for 2025, above KLA’s 10-year average of 16 times.
In his report, Hosseini concludes that there is limited upside potential for the stock. Despite KLA’s 49% increase in the past year, outperforming the iShares Semiconductor ETF’s rise of 46%, Susquehanna believes there are more attractive investment options available.
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