** Applied Materials AMAT.O shares dip 1.4% to $335.08 premarket after agreeing to a $252 mln settlement with the U.S. Commerce Dept for illegally exporting equipment to China

** The Commerce Dept said AMAT made 56 illegal shipments of chipmaking equipment valued at $126 mln to China's top chipmaker SMIC in 2021 and 2022 without required export licenses

** AMAT slated to report fiscal Q1 results after the bell on Thurs; Analysts expect rev to fall 4% yr/yr to $6.87 bln and adj EPS of $2.20, vs $2.38 a year ago, per LSEG data

** Wall Street's avg rating on AMAT is 'buy' among 37 analysts, with median PT of $360

** Through Weds close, shares have jumped 32% YTD compared to 17% gain in Philadelphia Semiconductor index .SOX and 0.8% fall for the Nasdaq .IXIC, and are just about 1% shy of their record intraday high

** Stock recently at 33 times expected earnings, vs its five-year avg forward PE of ~19, suggesting the stock may be overvalued, per LSEG Datastream

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))