US$238 - That's What Analysts Think Applied Materials, Inc. (NASDAQ:AMAT) Is Worth After These Results

As you might know, Applied Materials, Inc. (NASDAQ:AMAT) recently reported its annual numbers. The result was positive overall - although revenues of US$28b were in line with what the analysts predicted, Applied Materials surprised by delivering a statutory profit of US$8.66 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following last week's earnings report, Applied Materials' 32 analysts are forecasting 2026 revenues to be US$28.9b, approximately in line with the last 12 months. Per-share earnings are expected to increase 5.4% to US$9.26. Before this earnings report, the analysts had been forecasting revenues of US$28.9b and earnings per share (EPS) of US$9.20 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Applied Materials

The consensus price target rose 7.5% to US$238despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Applied Materials' earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Applied Materials at US$300 per share, while the most bearish prices it at US$170. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Applied Materials' revenue growth is expected to slow, with the forecast 1.9% annualised growth rate until the end of 2026 being well below the historical 7.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 20% annually. Factoring in the forecast slowdown in growth, it seems obvious that Applied Materials is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Applied Materials. Long-term earnings power is much more important than next year's profits. We have forecasts for Applied Materials going out to 2028, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.