Micron (MU): UBS Shares Feedback From Recent Investor Survey


The UBS’ research team recently asked investors to predict what others would rank as the most important issues for semiconductor giant Micron (NASDAQ:MU), and not surprisingly, ~90% of investors cited trajectory of earnings or gross margin as the most important factor. Investors were also encouraged to submit additional metrics they consider highly relevant and many investors wrote in “trough EPS level”, “DRAM pricing”, and secular factors (both supply and demand side) as factors they consider to be of high importance.

Lead analyst Timothy Arcuri noted, “Despite the results of our survey, a healthy bearish camp seems to have developed with many investors pointing to margins that are perceived to be peaking. Bullish investors continue to point to trough EPS and the sensitivity on the model in light of share repo and other factors that yield very attractive trough EPS – and trough valuation – even with fairly draconian pricing assumptions. Our view on MU’s cost position for 2019 has not changed – we continue to see potentially meaningful deceleration in cost downs, particularly in DRAM as it feels the bite of 1y. Even so, we expect Samsung to maintain flexibility and grow more or less in-line with demand into 2019 which made us favorably reconsider the downside case for MU’s EPS.”

Net net, Arcuri reiterates a Neutral rating on Micron shares, with a price target of $60, which represents a potential upside of 10% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, Arcuri has a yearly average return of 26.2% and a 69% success rate. Arcuri has a 67.2% average return when recommending MU, and is ranked #51 out of 4824 analysts.

Micron has one of the best ratings by the Street. TipRanks reveals that MU has a Strong Buy analyst consensus rating with 17 buy and 4 hold ratings in the last three months. Meanwhile the average analyst price target of $82.80 suggests the stock has upside potential of just over 52% from the current share price for the next 12 months.

 

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