Micron Technology, Inc. (NASDAQ:MU) may have ruffled some investor feathers on the Street lately with the newest worry: the company and its fellow chip giant Intel are shaking hands goodbye on their partnership to develop NAND flash memory on Gen4 3D-NAND. Yet, any share softness poses quite a compelling opportunity to bulls, wagers one of Wall Street’s best performing analysts.
Top analyst Vijay Rakesh at Mizuho notes that with stable memory pricing and robust fundamentals, this chip giant is soaring with a record high gross margin and a guide that bodes well for the first half of the new year.
Meanwhile, the idea that Intel may turn to Tsingua in licensing its 3D NAND production seems “highly unlikely,” argues the analyst, who notes that “Agreements between INTC/MU contain restrictions on working with third-parties, potentially giving MU a say in who INTC could partner with.”
Any pullback here is further reason to invest in this semiconductor company, writes Rakesh who on back of positive sentiment reiterates a Buy rating on MU stock. Rakesh’s price target of $50 implies a nearly 16% upside from current levels, highlighting just how confident this top analyst is on Micron’s opportunity at play, “attractive […] as one of the cheapest memory suppliers.”
Vijay Rakesh has a very good TipRanks score with a 75% success rate and a high ranking of #21 out of 4,745 analysts. Rakesh yields 30.9% in his yearly returns. When recommending MU, Rakesh gains 57.1% in average profits on the stock.
“We believe DRAM and NAND pricing remains stable, while stronger memory pricing and tight inventory commentary from PC ODMs are also positive for MU. While MU and INTC announced they would part ways at Gen4 3DNAND, we consider it unlikely INTC would share crucial DRAM/NAND manufacturing technology with Tsinghua. With strong fundamentals, continued cost reductions, and stable ASP / margins, EPS is now running at an annual rate approaching ~$10/shr. With GM at an all-time high of ~56%, and a stable 1H18 outlook,” asserts the analyst.
Commending “a backdrop” of sustained strength in its fundamentals, Rakesh ultimately continues to bet on this chip giant, full bullish steam ahead.
TipRanks indicates that this semiconductor player is a popular one in the financial universe, with 16 out of 19 analysts of the last 3 months rating a Buy on Micron stock and just 3 maintaining a Hold. The 12-month average price target stands at $59.06, boasting a return potential of nearly 38%.