UBS Reiterates Buy On Micron Technology, Increases PT To $36
In a research report released yesterday, UBS analyst Stephen Chin reiterated a Buy rating on Micron Technology (NASDAQ:MU) and increased his price target to $36 (from $35) ahead of the company’s release of its August results.
Chin wrote, “We believe favorable F4Q DRAM and NAND ASP trends continue to be favorable for Micron’s near/medium term earnings prospects, and could drive upside results. We believe supportive price trends can enable further gross margin expansion given tight supply in DRAM, seasonally stronger NAND and SSD demand, and cost reductions from 16nm NAND. We are also revising our estimates based on new DRAM and NAND bit production price assumptions. We now model for F4Q revenue/EPS of $4.17bn / $0.82 vs consensus of $4.15bn / $0.81. We assume Micron’s F4Q DRAM/NAND ASPs +3% / – 3% q/q (including mix effects) and bit sales +2% / +11% q/q. We expect overall gross margin of 33.5% or -90bps q/q due to higher SSD BOM costs and Numonyx charges.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Stephen Chin has a total average return of 21.6% and a 78% success rate. Chin has a 74.1% average return when recommending MU, and is ranked #139 out of 3304 analysts.