Benzinga | Dec 21, 2021 11:04AM EST

Wells Fargo Upgrades KLA Corp On Potential WFE Outperformance

KLA Corp (NASDAQ:KLAC) is poised for continued WFE (wafer front end) outperformance "driven by accelerating leading edge Foundry / Logic spend," according to Wells Fargo.

The KLA Analyst: Joe Quatrochi upgraded the rating for KLA Corp from Equal Weight to Overweight, while raising the price target from $360 to $500.

The KLA Thesis: Foundry and logic spend is likely to increase with capital intensity remaining elevated and as Intel Corporation (NASDAQ:INTC) targets to regain process leadership over Taiwan Semiconductor and Samsung by 2025, Quatrochi said in the upgrade note.

"With KLA's business / process control significantly driven by long-term development plans, we think the significant increase in company's 10-Q/K disclosed remaining performance obligation balance (RPO) supports upside to forward estimates," the analyst wrote.

He named KLA Corp as "our No. 1 top pick for 2022."

KLAC Price Action: Shares of KLA had risen by 5.23% to $405.64 at the time of publication Tuesday.

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