Piper Jaffray Maintains Overweight, $40 PT on Lam Research Following Merger Announcement

Piper Jaffray reiterates its Overweight rating and $40 target price on Lam Research LRCX as the company announced a definitive merger agreement to acquire Novellus NVLS in an all stock deal. Piper Jaffray writes, “One distinct advantage that the new Lam will have is exposure to Intel, historically a 10% customer to NVLS while Lam has not had any major product exposure. In turn Novellus will have greater exposure to DRAM, NAND and foundries for their products. We see this customer relationship solidifying across product lines as the industry starts to transition to 450mm. We expect the combined company to benefit from synergies in both R&D and SG&A as integration begins and particularly in the 450mm program where we could potentially see common platform strategies for the equipment coming to fruition.” LRCX closed at $39.48 per share on Wednesday.