Bank Of America Bullish On Axcelis Technologies In Semiconductor Market

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In a surprising turn of events, Bank of America has taken a bullish stance on Axcelis Technologies (ACLS), defying the recent market downturn and initiating coverage with a Buy rating.

ACL Solutions (ACLS) had a mixed performance on Friday, September 15, 2023, according to data from CNN Money. The stock opened at $179.76, slightly higher than the previous day’s close of $178.30. Throughout the day, ACL experienced a trading range of $175.43 to $181.45. The stock had a volume of 429,606 shares traded, which is lower than the three-month average volume of 510,492 shares.

ACL Solutions has a market capitalization of $5.8 billion. The company has shown strong earnings growth, with an increase of 88.46% in the previous year and a projected growth of 19.57% for the current year. ACLS is expected to maintain a steady earnings growth rate of 20% over the next five years.

According to an Investing report, Analyst Duksan Jang, in a recent note, believes the street is vastly “underappreciating” ACLS’s potential, citing its exposure to fast-growing markets, remarkable share gains, and superior growth prospects compared to its peers.

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Jang’s optimism stems from ACLS’s impressive 28% market share as the second-largest implant provider. This remarkable achievement can be directly attributed to Axcelis’s unwavering focus on this niche segment, with its entire tool sales portfolio dedicated to implant technology. Additionally, ACLS boasts a diverse and extensive product portfolio that further bolsters its market presence.

What sets Axcelis apart from its competitors is its status as the sole vendor offering a comprehensive range of implant products. This positions ACLS as one of the most rapidly expanding semiconductor capital equipment vendors in the United States.

In Jang’s own words, “We expect ACLS to continue gaining implant share, reaching 35% by CY25E, with every point of share gain representing ~$25mn in sales or $0.30 in EPS.” He added: “Axcelis is well positioned to benefit from the growing secular demand for semiconductor chips.”

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Furthermore, Jang stated, “Axcelis’s focus on ion implant technology and its wide breadth of portfolio should enable it to sustainably outgrow peers and the broader market over the next three years.”

Despite this overwhelmingly positive assessment, shares of ACLS experienced a 7.08% dip in mid-day trading Friday, possibly reflecting broader market sentiment rather than the company’s underlying fundamentals. Nevertheless, investors and industry experts will be closely watching Axcelis Technologies as it continues on its path of innovation and market expansion.

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