Micron Technology (MU) PT Raised to $38 at MKM Partners

MKM Partners raised its price target on Micron Technology (NASDAQ: MU) to $38.00 (from $34.00) while maintaining a Buy rating.

Analyst Ruben Roy comments "We estimate that DRAM gross margin will exceed 50% in the May quarter versus roughly 20% in the year ago quarter. With significantly higher revenue and gross margin guidance as well as lower operating expense guidance than we previously expected, MU’s EPS guidance range between $1.43 and $1.57 is significantly higher than the current consensus estimate of $0.91. We continue to believe that the complexities inherent to node transitions in DRAM and higher-layer 3D NAND will naturally limit industry bit growth and, consequently, we believe that the current industry cycle is shaping up to be a multi-year event. In the meantime, we believe that MU’s execution on cost reduction in both DRAM and NAND are noteworthy. With DRAM margins exceeding 50%, we believe that it is increasingly evident that MU is catching up to competitors from a technology perspective."

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