Micron Shares Haven't Peaked, Credit Suisse Says

Credit Suisse research analyst, John Pitzer, believes Micron Technology, Inc. MU has more left in the tank, and reiterated an Outperform rating on the stock with a $40 price target.

Pitzer sees Micron as structurally undervalued and listed three reasons warranting the upside.

• “Not enough time has passed for a cycle-ending supply response"
• "The cost of capacity is increasing structurally"
• "New applications (AI/DL, AD, SSDs) are supporting diversification and a demand-pull not seen since 1994-95"

Pitzer also sees stability to DRAM based on price checks and smaller-than-expected NAND declines in the second half of 2017. 

Micron is expected to release its quarterly earnings report in the end of June.

“We expect MayQ EPS of at least $1.60, $0.10 ABOVE Street of $1.50. We expect AugQ EPS of $1.89, $0.33 ABOVE Street of $1.56. We are raising our CY17 EPS/FCFPS to $6.28/$4.04 from $5.13/$3.68 and our CY18 EPS/FCFPS to $6.85/$5.27 from $5.25/$4.34. Street Consensus EPS for CY17/18 is $5.41/$4.44 respectively,” Pitzer noted.

Micron closed at $31.06, down 1.5 percent.

See Also:

Micron May Be Facing Its Biggest Opportunity For Fundamental Improvement

Credit Suisse Sees 40% Upside In Micron Shares