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Buy Micron (MU) on Better-than-Feared Intel (INTC) Results, Needham & Company Says

July 16, 2015 6:34 AM EDT
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Price: $93.78 +0.57%

Rating Summary:
    43 Buy, 9 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 2 | New: 35
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Needham & Company analyst Rajvindra Gill is telling clients to buy Micron Technology (NASDAQ: MU) today in the wake of better-than-feared results from Intel (NASDAQ: INTC) after the close. The firm reiterated its Strong Buy rating and price target of $40.

Gill commented, "After witnessing a series of negative PC data points and fears of a slowdown in data center spending, INTC forecasted sales higher than the Street driven by PC inventory replenishment (ramp of INTC's Skylake platform and Windows 10 OS builds), increase server CPU sales, IoT, and higher GMs. Coming on the heels of INTC's results, we would be buyers of MU as we believe the stock has entered into oversold territory (down 44% YTD and 22% over the past month, vs up ~2% and ~1% for the S&P 500, respectively). We expect PC weakness to abate in 2H15/'16 (builds are the worst period since the financial crisis) as inventory has to be replenished, which should stabilize PC DRAM pricing. In addition, as we enter into 2016, MU should generate cost leverage as 20nm kicks in and benefit from a higher mix of TLC NAND. M&A optionality should also keep a floor on the valuation."

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 $18.89 yesterday.



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