Goldman Sachs Constructive On Applied Materials (AMAT)

Goldman Sachs has a research report on Applied Materials, Inc. AMAT, and it has a $17 price target and it's on America's Buy List. In a note sent to clients, Goldman writes, "We continue to expect about 20% growth in CY2011 semi capex, and are encouraged that the company is now tracking 17 new projects, 2 more than last quarter. We believe that strong growth of tablets/smartphones that use large amounts of NAND memory and run primarily on chips made at foundries will make up for weak DRAM fundamentals. NAND was just 9% of orders in 3QCY but should be up significantly in 2011 driven by new capacity. Overall, our FY11 revenue estimate of +12% yoy is above guidance of flat +/-10%. However, for the stock to significantly outperform and get full credit for the cash flow and improved operating model from its restructuring efforts, we believe Applied will need to increase its dividend or share repurchases." Shares of AMAT are up 21 cents in pre-market trading to $12.59.