Goldman Cuts Price Target on Micron (MU), Still Recommends SanDisk (SNDK)
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Price: $971.66 +2.30%
Rating Summary:
52 Buy, 11 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
52 Buy, 11 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Following the releases of Micron Technology's (NASDAQ: MU) fourth quarter results, Goldman Sachs is reaffirming its Neutral rating on the stock and is lowering its price target from $6.50 to $6.00.
The for the quarter, sales fell 2 percent quarter over quarter to $2.09 billion, while gross margins decreased 40 bps to 14.6 percent. Earnings resulted in a loss of $0.19 per share for the quarter and were substantially poorer than both Goldman's and the Street's forecasts.
The firm notes the weak results reflect, "equity method investment losses, which were mostly attributable to Micron’s share of Inotera’s losses during the quarter." Subtracting Inotera, Goldman calculates an earnings loss of $0.12 per share for the quarter.
Overall, Goldman encourages investors to avoid the stock at all costs as they predict the DRAM market will continue to underperform and result in losses for the next two quarters at minimum. Due to its healthier margin and supply/demand dynamics, Goldman recommends SanDisk (Nasdaq: SNDK).
An analyst at Goldman comments, "Although Micron is executing well in NAND, we do not believe that this will be enough to offset the losses generated in DRAM in the near term. We would need to see a material improvement in the DRAM market in the form of significant supply cuts, industry consolidation, or stronger PC demand to become constructive on the stock.'
Goldman tweaked its FY12 and FY13 EPS estimates from $0.15 and $0.78 to $0.06 and $0.79.
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 $5.54 yesterday.
The for the quarter, sales fell 2 percent quarter over quarter to $2.09 billion, while gross margins decreased 40 bps to 14.6 percent. Earnings resulted in a loss of $0.19 per share for the quarter and were substantially poorer than both Goldman's and the Street's forecasts.
The firm notes the weak results reflect, "equity method investment losses, which were mostly attributable to Micron’s share of Inotera’s losses during the quarter." Subtracting Inotera, Goldman calculates an earnings loss of $0.12 per share for the quarter.
Overall, Goldman encourages investors to avoid the stock at all costs as they predict the DRAM market will continue to underperform and result in losses for the next two quarters at minimum. Due to its healthier margin and supply/demand dynamics, Goldman recommends SanDisk (Nasdaq: SNDK).
An analyst at Goldman comments, "Although Micron is executing well in NAND, we do not believe that this will be enough to offset the losses generated in DRAM in the near term. We would need to see a material improvement in the DRAM market in the form of significant supply cuts, industry consolidation, or stronger PC demand to become constructive on the stock.'
Goldman tweaked its FY12 and FY13 EPS estimates from $0.15 and $0.78 to $0.06 and $0.79.
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 $5.54 yesterday.
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