UPDATE: Credit Suisse Raises PT on Micron Technology Ahead of F3Q Results

In a report published Monday, Credit Suisse analyst John W. Pitzer reiterated an Outperform rating on Micron Technology MU, and raised the price target from $14.00 to $20.00.

In the report, Credit Suisse noted, “Micron reports F3Q results Wednesday, June 19 after the close. Despite an unfavorable mix shift to PC DRAM, we expect MU to post upside to F3Q and guide F4Q above Street as the company continues to benefit from favorable pricing throughout its memory portfolio. More importantly, we continue to argue that MU is the most leveraged investment vehicle to exploit a STRUCTURALLY IMPROVING memory industry. Our Global Industry Supply/Demand Model suggests NAND and DRAM demand growth outstripping supply growth in 2013 by 600bps and 300bps respectively. In addition, upon the closure of Elpida we see $1.00-$1.50 cents of accretion to our current CY14 estimate of $0.83. We are raising our PT from $14 to $20 - while this would represent a rich 2.8 times BVPS, it would be less than 10x an earnings power of $2.00 plus and more importantly, slightly less than 1 times replacement cost including Elpida capacity.”

Micron Technology closed on Friday at $12.76.