Analysts at Deutsche Bank provided their outlook on KLA Corporation (NASDAQ:KLAC) ahead of the company’s Q3 results, lowering their price target to $425 from $475 while reiterating their buy rating. The analysts expect the company to report Q3 results in line with current Street estimates and believe the company will likely highlight supply constraints once again limiting shipments.

For Q4, however, the analysts see increased supply chain risks from COVID shutdowns in China and availability of logistics and believe the company will likely guide more conservatively than Deutsche Bank’s revenue estimate of up 11% quarter-over-quarter.

While longer-term the analysts remain constructive on the company's revenue sustainability with SPC intensity rising, they also acknowledge increasing macro uncertainties that challenge the WFE spend and demand outlook in the near to medium term.