Micron (MU) Gains as UBS Research Suggests DRAM Price Stability
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Micron Technology (NASDAQ: MU) is solid higher (4.9%) Friday after UBS analyst Stephen Chin reiterated a Buy rating and raised his price target of $17.00 (from $14.00) after the firm's Global I/O report on Memory revises upward their DRAM supply/demand forecasts due to more favorable near term pricing as DRAM spot pricing is up 17% from the early June lows, and 2H June contract pricing remained flat from 1H June. This is consistent with Micron's F3Q earnings call (30-Jun) commentary.
The firm's global team's recent checks suggest PC and smartphone DRAM demand in C2H16 will be supportive from a shipment or content perspective based on leaner inventory levels at memory suppliers and popular memory configurations for consumer PCs in the current back-to-school season.
"Contract price trends from now through late October will be key as it could provide a gauge for demand seasonality and Micron profitability," he said. "We keep a Buy rating as we believe Micron resolved its recent operational issues and a memory industry recovery should also benefit its stock."
Shares of Micron Technology closed at $14.03 yesterday.
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