Micron Technology (MU) PT Raised to $100 at Baird, Remains Top Pick for 2018 on Strong Memory Trends

Baird raised its price target on Micron Technology (NASDAQ: MU) to $100.00 (from $60.00) while maintaining a Outperform rating.

Analyst Tristan Gerra comments "Raising our estimates on stronger-than-expected memory trends. In DRAM, we expect a significant increase in contract pricing in C1H18, while NAND flash C1H pricing reductions are more muted than previously expected. Micron remains our top large-cap idea for 2018." The analyst cited the same memory trends for an earlier upgrade on Western Digital (NASDAQ: WDC) to Outperform.

As for the specifics on NAND, Gerra comments "while pricing is declining, declines are more muted than our initial expectation, with contract pricing expected to decline 3-4% in C1Q QoQ, and in a higher single-digit range in C2Q, also better than seasonal."

The analyst is now expecting NAND contract pricing to decline 15-20% in C2018 which is less than previously expected and "possibly less than Micron's targeted production cost reductions this year (easy comps/improving mix)."

Gerra also believes ADAS will drive demand for 1 terabyte NAND storage in vehicles.

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