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Analysts Reiterate Positive Outlook For Micron Technology (MU)

Updated from 2:24 p.m. ET with Jeffries & Co. analyst comments.

NEW YORK (TheStreet) -- Analyst ratings for semiconductor company Micron Technology (MU) have come in mostly positive, with Bernstein Research, Jeffries and TheStreet all lifting targets while Wells Fargo downgrades.

Micron Technology shares have gained 1.7% to $17.12 as of 3:10 p.m. New York time.

Bernstein Research analyst Mark Newman reaffirmed his "outperform" rating, revising his price target to $24 from $4. Newman cites recovering dynamic random-access memory (DRAM) production and the company's acquisition of Elpida as reasons for the positive outlook.

Jeffries & Co analyst Sundeep Bajikar maintained a "buy" rating and updated the price target to $30 from $25, due to the belief the maturing DRAM manufacturing industry is becoming more stable. Jefferies says Friday's selloff, which saw share prices plummet 8.6%, was due to "profit taking, short-term focus on Elpida margins, and lack of investor confidence in stability of DRAM prices."

Wells Fargo, however, downgraded the company to "underperform" from "market perform", stating a volatile past and high-risk future make for an unattractive asset. Risks include unstable pricing for DRAM and NAND chips and the company's unreliable profitability. Despite the downgrade, Wells Fargo analyst David Wong revised his price target range to $14 to $17 from $11 to $14.

TheStreet Ratings team upgraded Micron Technology to a "buy" from "hold." The team rates the stock as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate Micron Technology Inc (MU) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 44.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 729.16% and other important driving factors, this stock has surged by 219.96% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 45.02% is the gross profit margin for MICRON TECHNOLOGY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 60.07% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 59.33% to $717.00 million when compared to the same quarter last year. In addition, MICRON TECHNOLOGY INC has also vastly surpassed the industry average cash flow growth rate of -5.08%.

Written by Keris Alison Lahiff.

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