S&P upgrades KLA

S&P said it upgraded the ratings on KLA Corp. and its debt to BBB+ from BBB.

“The upgrade reflects KLA's consistent operating performance and cash flow generation through the semiconductor industry downturn and our expectation that the company will expand in line with or exceed wafer fab equipment (WFE) industry growth over the next several years,” said S&P in a press release.

“We expect KLA's revenues to reach $5.6 billion in fiscal 2020, more than doubling its scale over the past five years. We believe its revenues and cash flow will be less volatile because of its expanding services segment (roughly 25% of revenues) and added product diversity through the Orbotech Ltd. acquisition completed a year ago,” said S&P.

The outlook is stable.

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