Needham Weighs in on Micron Technology, Inc. Q3:F15 Earnings Results

Needham analyst Rajvindra Gill came out today with a research report on Micron Technology, Inc. (NASDAQ:MU) following the company’s release of its fiscal third quarter earnings results. The company provided weak guidance despite PC unit wekaness, lower DRAM pricing, and pressure towards RAM GM%. Gill reiterated a Buy rating on the stock with a price target of $40.00. Shares of MU closed yesterday at $24.02, down $0.04, or -0.17%.

Gill wrote, “While we were disappointed to see MU guide an increase in DRAM cost/bit, we believe the headwinds should abate as DDR4 and 20nm ramp costs decline. Given MU’’s expectations to grow above the market in ’16, we expect these cost reductions to amplify leverage next year. 20nm is running at low volumes but is progressing well, and bit crossover vs other nodes is expected in 1H16.”

Further, “We expect the following: a) PC market to stabilize in C2H15 and improve heading into ’16, b) a higher ramp of TLC NAND, which should have a cost benefit, c) the new Inotera agreement yielding some level of accretion to the DRAM model, and d) 3D NAND leadership. All else equal, if market conditions improve, cost leverage should kick in, and we should see DRAM GM% improve.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rajvindra Gill has a total average return of 23.5% and a 64.0% success rate. Gill has a -7.0% average return when recommending MU, and is ranked #33 out of 3679 analysts.

Out of the 29 analysts polled by TipRanks, 22 rate Micron stock a Buy, 6 rate the stock a Hold and 1 recommends Sell. With a return potential of 59.7%, the stock’s consensus target price stands at $38.35.

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