Micron Technology (MU): Raising PT After Sizable Positive Preannouncement - UBS
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UBS reiterated its Buy rating on shares of Micron Technology (NASDAQ: MU) after the company positively preannounced that sales would at or above high-end of guidance.
Micron positively preannounced for the 2nd consecutive quarter guiding November sales to $3.975B ±$50M (vs $3.55B-3.85B previously). Gross margin is expected to be 25.5% (vs 23-25.5%). EPS is expected to be $0.28 ± 3c (vs $0.13-0.21).
The majority of this upside is due to better DRAM ASP. Micron also expects the Inotera deal to close 6-Dec, and it should be immediately accretive to DRAM gross margin, EPS, and free cash flow. For FY17, we estimate the integration of Inotera could be accretive to GM by 200-300bps, EPS by 6-8% (assumes new funding of $2.5B in debt, $500M equity; $1B from balance sheet), and free cash flow by $250-400M.
FY17 EPS goes to $1.17 from $0.92 and the $24 price increases from $21.50.
Shares of Micron Technology closed at $19.53 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change, Earnings
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