Deutsche Bank Notes Uncertainty in Micron Technology (MU) Q4 Supply Chain

Deutsche Bank analyst Sidney Ho reiterated a Buy rating and $110.00 price target on Micron Technology (NASDAQ: MU) but said the supply chain checks suggest more uncertainty in CQ4.

"Our most recent checks point to continued memory pricing strength in CQ2 and CQ3 that we believe is better than the market anticipated a couple of months ago," Ho commented. "However, there has also been increasing concerns of inventory build in the supply chain that makes further price increases in CQ4 less certain."

"While most companies suggest that demand across key end markets remain healthy, we are hearing that the supply chain has been more cautious about the industry-wide double ordering and that hyperscale customers have been less willing to take on more inventory. Many companies prefer to wait for better visibility into real end demand in 2H CY21 and view the price negotiation in CQ3 as a key factor to monitor. We believe this change in sentiment has led to MU’s share price underperforming in the past month, but with the stock now trading at only ~1.75x NTM book value (and book value should continue to rise), we believe risk-reward remains positive and therefore we maintain our Buy 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 $80.39 yesterday.

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