Needham & Company Upgrades Micron Technology (MU) to Strong Buy; $50 PT
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Needham & Company upgraded Micron Technology (NASDAQ: MU) from Buy to Strong Buy with a price target of $50.00 (from $40.00) citing long-term tailwinds in NAND gross margins.
Analyst Rajvindra Gill said, "While implied GM guidance was slightly below expectations, we see MU making the right decision to invest in controller and firmware in order to grow its SSD business in the future. We urge investors to look past the temporary NAND GM hit from these upfront costs and focus on the materially improving NAND GMs that we expect in CH15 as MU benefits from the cost advantages of an increasing mix of 16nm TLC (15-20% discount) and the ramp of its proprietary SSD solutions. In addition, we increase our P/E fwd multiple to 15x as we believe valuation multiples in consolidated industries eventually expand to 15-20x."
The firm raised FY 2014 EPS from $2.85 to $3.06 and FY 2015 EPS from $3.00 to $3.40.
Shares of Micron Technology closed at $31.26 yesterday.
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