Analyst Blayne Curtis of Barclays began coverage of two semiconductor stocks: Micron Technology, Inc. (NASDAQ:MU) and SanDisk Corporation (NASDAQ:SNDK). This move is significant given the significant decline in semiconductor stocks so far this year.
For several months, analysts have been apprehensive about the negative impact on semiconductor giants caused by the declining PC sales. Since 2011, the price of DRAMS (the memory chip that’s essential for PC production) has been falling consistently, due to factors such as decreasing PC demand, growing competition, and consolidation within the sector. Some analysts had even predicted that the fall of PC would eventually lead to the fall of DRAM.
According to Curtis, the softness in overall PC and DRAM demand is temporary. However, he admitted that things could get even worse before improving eventually. The analyst said, “In 2015, we have seen a demand vacuum with both PCs and handsets a hard compare following a strong 2014, but both should be better next year.“
Micron Technology, Inc.
For Micron, Curtis believes the company’s stock price has already factored in near-term risks. Curtis initiated coverage on the stock with an Overweight rating and a price target of $20. Out of 28 analysts polled by TipRanks who have recently offered recommendations on Micron, 21 have rated is a Buy, 6 as Hold and only 1 as Sell. Based on the 12-month price targets offered by the 28 analysts in the past 3 months, the average price target for the stock is $25.83.
On the other hand, Curtis is not so bullish about SanDisk. While the stock is showing positive long-term bias, he is waiting for additional data related to the Enterprise ramp and for the fall in removal volumes before making a more definitive recommendation. Recently, SanDisk has increased its investments in the Enterprise storage market. One of its notable investments is the acquisition of Fusion-IO, a provider of solid-stage technology and I/O solutions, for $1.1 billion. Curtis initiated coverage of SanDisk with an Equal Weight rating and a price target of $60.
In the past 3 months, 20 ranked analysts on TipRanks have offered their recommendations for SanDisk. Out of these, 9 have recommended a Buy, 9 as Hold, and 2 analysts have given a Sell rating. Based on price targets set by these analysts, the average price target for the stock is $61.95, with the lowest estimate at $40.
Blayne Curtis rates several stocks in the technology sector. Overall, he has 57% success rate recommending stocks with a +7.5% average return per rating when measured over a one-year horizon and no benchmark.