Micron Technology (MU): Victory Lap on MU's Weak Quarter - Needham
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Rating Summary:
43 Buy, 9 Hold, 2 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 11 | Down: 11 | New: 43
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Needham & Company analyst, Rajvindra Gill, concluded, during a recent trip to Asia, that Micron Technology (NASDAQ: MU) was having issues with mobile DRAM qualification on 20nm and continued to cede market share. This materialized on this earnings call as MU guided GMs 400bps below the Street and pointed to another qrtly operating loss.
While MU was migrating capacity to 20nm, the slope of the cost curve should be smaller than the price declines curve, hence the analyst saw risks to GMs and operating losses. The analyst has been perplexed at the recent rise in the stock price given this issue and believes the stock is overvalued at these levels. Even factoring in an improvement in GMs, the analyst projects $0.55 Non-GAAP EPS in FY17, making the stock expensive.
No change to Underperform rating.
For an analyst ratings summary and ratings history on Micron Technology click here. For more ratings news on Micron Technology click here.
Shares of Micron Technology closed at $13.76 yesterday.
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