Market Overview

BMO Sees Nearly 50% Upside Potential In Micron, 'Attractive' Risk-Reward Picture

BMO Sees Nearly 50% Upside Potential In Micron, 'Attractive' Risk-Reward Picture

Although Micron Technology, Inc. (NASDAQ: MU)'s fundamentals are still fluid, the stock has an attractive valuation, according to BMO Capital Markets.

The Analyst

Analyst Ambrish Srivastava upgraded Micron from Market Perform to Outperform and hiked the price target from $32 to $50.

The Thesis

Micron's valuation and its more structurally profitable nature are the drivers behind BMO's improved outlook, Srivastava said in the Monday upgrade note. 

The semiconductor maker's shares have bottomed out or are close to book value in the last 10 years, the analyst said. The company is unlikely to report negative free cash flow even under "dire" pricing scenarios that BMO has taken into consideration, he said. 

Micron has managed to close its gap with larger rivals Samsung Electronics Co Ltd (OTC: SSNLF) and SK Hynix in DRAM, Srivastava said. At the same time, Micron's costs are about $2 billion lower than peers, he said.

If the DRAM ASP falls below $3.80/GB — which is necessary for Micron to break even on free cash flow, the analyst said — the company could lower capex further and manage operating expenditures to some extent. 

"We rate the shares Outperform, as we believe we are close to a cyclical trough on the stock and view an attractive risk-reward profile for the shares from current levels." 

Price Action

Micron shares were surging 4.79 percent to $34.26 at the time of publication Monday. 

Related Links:

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

Analysts: Micron's Buyout of Joint Flash Venture With Intel A Long-Term Positive

Latest Ratings for MU

Sep 2019MaintainsSell
Sep 2019MaintainsUnderperform
Sep 2019MaintainsNeutral

View More Analyst Ratings for MU
View the Latest Analyst Ratings

Posted-In: Ambrish Srivastava BMO Capital MarketsAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (MU + SSNLF)

View Comments and Join the Discussion!

Latest Ratings

ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Salesforce's M&A Earns Cloud Company A Spot On Wedbush's 'Best Ideas List'

42 Stocks Moving In Monday's Mid-Day Session