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Morgan Stanley Sees Choppier Waters Ahead For Micron, Says To 'Use Strength As A Selling Opportunity'

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Morgan Stanley Sees Choppier Waters Ahead For Micron, Says To 'Use Strength As A Selling Opportunity'

Micron Technology, Inc. (NASDAQ: MU) lowered its fiscal first-quarter revenue guidance Wednesday to the low-end of the previous range of $7.9 billion to $8.3 billion, while it sees EPS above the midpoint of its previous guidance of $2.95, plus or minus 7 cents.

The Analyst

Morgan Stanley analyst Joseph Moore maintained an Equal-weight rating on Micron with a $48 price target.

The Thesis

The margin upside is an indicator of Micron's strong execution, Moore said in a Wednesday note. (See his track record here.)

The chipmaker referenced strong end market demand, but expects inventory clearance to take a couple of quarters, the analyst said. 

Moore said he is more negative than the company's longer-term forecasts on end market demand as well as supply.

DRAM wafer equipment shipments are up 60 percent year-to-date, and capex is expected to remain strong through early 2019, he said. 

Morgan Stanley expects DRAM conditions to remain difficult throughout 2019.

"We remain EW and would use strength as a selling opportunity," Moore said. 

The Price Action

Micron shares, which have lost about 6 percent in the year-to-date period, were last seen down 1.05 percent to $38.30 Thursday.

Related Links:

Micron Analysts Parse The Q4 Print; Macquarie Says 'We Expect The Downturn To Be Short-Lived'

RBC Stays Bullish On Micron, Lowers Estimates To Reflect Tougher Memory Forecast

Latest Ratings for MU

DateFirmActionFromTo
Sep 2019ReiteratesOverweight
Sep 2019ReiteratesBuy
Sep 2019MaintainsOutperform

View More Analyst Ratings for MU
View the Latest Analyst Ratings

Posted-In: Joseph Moore Morgan StanleyAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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