Micron Technology (MU)

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Micron Technology, Inc. Reviewed By Credit Suisse Group

Published by Henry Williams on July 21, 2015 at 6:21 am EST

imgMicron Technology, Inc. Reviewed By Credit Suisse Group

Credit Suisse highlights factors affecting Micron’s recent weak performance, and discusses how the company can capitalize on future opportunities to retain its position
Credit Suisse maintains its “Outperform” rating for Micron Technology, Inc. (NASDAQ:MU) stock with a price target of $34. The firm highlighted certain factors responsible for the decline in the stock price of the company, while also looking at future opportunities through which the semiconductor manufacturer can regain its position.

Analyst John W. Pitzer said that the Micron’s EPS has been lowered from $0.97 in first quarter of fiscal '15 (1QFY15) to an estimated EPS of $0.35 in 4QFY15, due to poor timing, low pricing and weak execution. Although analysts blame the decline in PC demand for the weak earnings results, Credit Suisse has identified other factors as well which continue to affect the company's results.

The rating agency noted that DDR4/DDR4 LP at 25 nm produced unimpressive results for the server/mobile applications. It was also affected by the lack of availability of 20 nm capacity at Hiroshima and Inotera. Lastly, it also outlined Samsung’s shift toward 20nm as another troubling reason for the company.

However, the firm feels it is too early to anticipate that Micron’s EPS for August quarter will be the lowest. Meanwhile, it highlights some factors which might help boost the company’s results. The firm believes that although PC demand is low at present, it has the potential to rise in the future. The mobile demand is also expected to go up as the iPhone 6S is expected to offer 2 GB RAM.

Micron is also expected to improve its DDR4 yields at 25 nm in the November quarter, and increase the availability of 20 nm in November quarter by 10%, February quarter by 30% and May quarter by 50%. The sell-side agency also said that concerns regarding Samsung’s 20 nm technology and an increasing cost gap between the two companies is highly exaggerated.

The Street seems Bullish on Micron. Of the 35 analysts at Bloomberg, 27 rate the stock a Buy, 6 suggest a Hold and only 2 recommend a Sell. The 12-month consensus price target has been set at $29.39.
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http://www.businessfinancenews.com/23195-micron-technology-inc-reviewed-by-credit-suisse-group/

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