NEW YORK (TheStreet) -- Shares of Micron Technology (MU) - Get Micron Technology, Inc. Report are gaining 5.19% to $13.38 in pre-market trading on Thursday as Nomura boosted its rating on the stock to "buy" from "reduce."
The firm upped its price target to $18 from $8 on shares of the Boise, ID-based semiconductor company.
"Our change in stance is based on recent supply shortages in memory, firmer pricing, and 20nm execution. We believe that semiconductor fundamentals are healthy or improving across several areas, including analog, SSDs, DRAM, and capital equipment," Nomura wrote in an analyst note this morning.
Micron has been one of the worst-performing stocks in the semiconductor sector over the past 12 months as it is down 48% year-over-year vs. a 5% decline for peers, the firm noted.
Additionally, Nomura believes the company has executed in delivering much more 20nm volume in the marketplace, which should drive positive operating margins as costs decline 15% to 20%.
"The improvement in profitability is important because Micron's price-to-book multiple, which we estimate at around 1x, closely tracks operating margins," the firm noted.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures.
But the team also finds weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: MU