Needham & Company Upgrades Micron Technology (MU) Two-Notches to Buy, $33 PT
Needham & Company upgraded Micron Technology (NASDAQ: MU) from Underperform to Buy with a price target of $33.00.
Analyst Rajvindra Gill commented, "We believe MU has regained its customer positioning in 20nm, is successfully migrating to 3D NAND (2nd gen 64-layer) and is benefiting from a substantially better pricing environment in DRAM. The key question is: Are we returning back to the 2014 cycle where GMs peaked at 35.8% and the stock hit $36.50? We think so. Unlike in '14, DRAM products are targeting more than just PCs -- cloud computing, data centers, networking, graphics and auto/ADAS. Demand for DRAM is expected to grow 20-25% Y/Y vs supply growth of 15-20%. On the NAND side, demand has seen a huge increase (40-45% demand bit growth) fueled by adoption of enterprise SSDs and mobile storage. With cost conversions underway both in DRAM and 3D NAND, we think MU could approach GMs of ~36% late-CY17 and see earnings of $3.30."
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Shares of Micron Technology closed at $20.58 yesterday.