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Applied Materials Cut to a “Sell” at Goldman Sachs (AMAT)

Semicondictor equipment maker Applied Materials, Inc. ( AMAT ) on Monday got hit with a dreaded "Sell" call by analysts at Goldman Sachs.

The firm also set a $10.50 price target on AMAT, suggesting a more than 9% downside to the stock's Friday closing price of $11.57.

Goldman noted AMAT's recent rally (up around 8% in the past five sessions) has now created substantial downside risk. It also noted it expects orders to fall for the next several quarters, citing an excess of supply in the semiconductor market.

A Goldman analyst commented, "We continue to believe that record shipments to the foundries and Intel will lead to excess supply and a downward trend in orders through mid-2012."

Applied Materials shares fell 42 cents, or -3.6%, in premarket trading Monday.

The Bottom Line

Shares of Applied Materials ( AMAT ) have a 2.77% dividend yield, based on Friday's closing stock price of $11.57. The stock has technical support in the $10 price area. If the shares can firm up, we see overhead resistance around the $13 price level.

Applied Materials, Inc. ( AMAT ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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