Summit Research Partners Positive On Applied Materials Upcoming Q4 Results

Applied Materials, Inc. (NASDAQ: AMAT) is scheduled to report its fourth quarter results on Thursday after market close.

Srini Sundararajan of Summit Research Partners recommends investors buy shares of Applied Materials heading in to the quarter and estimates there could be $1 upside post-earnings to share.

Sundararajan expects Applied Materials SSG revenues to decline slightly or stay flat in the quarter due to new orders falling six percent in the July quarter. Display is expected to be up strong in the quarter, setting up nicely in to the January quarter. The analyst adds that his checks suggest the company was already attaining its fourth quarter targets relatively early due to orders from Micron, United Microelectronics, Samsung and Global Foundries.

Sundararajan also expects that the company's merger with Tokyo Electron may still happen. The analyst adds that "more egregious" mergers have been approved in the past, so a merger with Tokyo Electron "is not something to have a headache over." In addition, the analyst sees "minimal" longer-term downside for either company if the merger does collapse given the "excellent prognosis" for calendar year 2015.

The analyst has a $24 price target on shares.