Micron (MU) Price Target Raised at Goldman Sachs on DRAM Demand; Analyst Maintains Neutral Rating (LRCX) (KLAC) (SNDK)
- Wall Street ends week positively; S&P 500, Dow hit record highs
- Bitcoin (BTC) Drops 3% as Turkey Bans Cryptocurrency Payments Citing Lack of Regulatory Supervision
- Morgan Stanley (MS) Archegos-Related Loss Appears to be $911M
- Dollar at 4-week low on retreating Treasury yields
- J&J (JNJ) Privately Asked Rival Covid-19 Vaccine Makers to Inspect Clotting Risks, AstraZeneca (AZN) Said Yes but Pfizer (PFE) and Moderna (MRNA) Declined - Report
Goldman Sachs maintained a Neutral rating on Micron Technology (NASDAQ: MU) and raised its price target to $32.00 (from $29.00). Analyst James Covello noted improved DRAM demand.
"We raise our EPS estimates and price target on Micron (Neutral) to reflect solid DRAM demand on content/box, Inotera’s reported 3Q14 income, the buyback, and a weaker yen. We are now modeling about 1% DRAM undersupply in 2015 (from balanced prior). While supply has continued to grow faster than we were modeling (we now estimate Samsung’s bits will grow about 53% in 2014 vs. low 30% range initially), we believe demand has exceeded our estimates. Our new content estimates for phones, tablets and servers are now all modestly above third party forecasts to better reflect this," said Covello.
"We are now more constructive on Micron’s EPS near-term growth but we remain Neutral and prefer SNDK (Nasdaq: SNDK) as we believe the DRAM industry is over earning," he added. "We expect excess returns to continue to attract supply (creating upside risk to our 2015 base case supply estimate of 25% yoy). Specifically, we estimate DRAM EBIT margins averaged in the high 30%/low 40% range in 3Q14, and that commodity DRAM margins are in the 50% range at the leading suppliers, well above the NAND industry (where low returns and negative FCF for some participants could help limit supply growth) and one of the highest margin levels in all of semis. DRAM FCF margins are also significantly higher. We believe this partly explains why DRAM capex is up about 40% yoy in 2014E and tracking higher in 2015E."
Shares of Micron Technology closed at $34.30 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Bayerische Motoren Werke AG (BMW:GR) (BMWYY) PT Raised to EUR108 at Goldman Sachs
- Auto Trader Group PLC (AUTO:LN) (ATDRY) PT Lowered to GBP6.77 at Goldman Sachs
- Lanxess AG (LXS:GR) (LNXSF) PT Raised to EUR61 at Morgan Stanley
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Hot Comments
Related EntitiesGoldman Sachs
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!