Micron Shares Haven't Peaked, Credit Suisse Says

Credit Suisse research analyst, John Pitzer, believes Micron Technology, Inc. (NASDAQ: 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