Micron (MU) PT Lifted to $21 at Cowen Ahead of Inotera Deal Closure
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Cowen analyst Timothy Arcuri reiterated an Outperform rating and bumped his price target on Micron Technology (NASDAQ: MU) to $21.00 (from $19.00) ahead of the Inotera deal closure.
Arcuri commented, "We see Inotera adding ~$0.15-0.20 and $300-400MM to MU's EPS and FCF, respectively, in both C2017/18. Leverage will increase (PF leverage ~3.7x on a gross basis, ~2.5x on a net basis), but MU should still be able to rapidly de-lever and achieve 1.5x net debt/EBITDA by CYE17. Ultimately, we raise target $19 to $21 on same peer 5x multiple as Inotera should REDUCE MU's EV/EBITDA by ~0.5x."
The firm sees the closure of Inotera likely by mid-December and thinks that MU will begin to guide results with Inotera starting in the Feb Q.
Shares of Micron Technology closed at $16.86 yesterday.
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