Micron Technology, Inc. (NASDAQ:MU) Remains Positive Amidst Conflicting Analysts’ Theories

Semiconductor devices provider, Micron Technology, Inc. (NASDAQ:MU), continued its run, enforcing that it’s future is bright and safe as Samsung Electronics continue to contain its DRAM capacity. The company’s fears about Samsung’s increased spending towards building DRAM capacity has come to an end as the latter is curtailing its DRAM ramp-up.

Expert breakdown of the MU candlestick chart.

Samsung worries over

After Samsung dropped hint that its DRAM capacity may not be scaled-up as stated earlier, analysts at JPMorgan acted swiftly to affirm their outlook on Micron Technology, Inc. (NASDAQ:MU). In its research report, the firm said that they continue to maintain ‘Overweight’ rating on the stock and have set $40 price target on it. The analysts are divided over the outlook for DRAM demand as where Drexel Hamilton is upbeat about the demand; Jefferies think that DRAM price weakness will roll over to the second quarter due to soft PC demand. Hamilton appeared positive on demand, but Jefferies said that prices will decline before stabilizing, helped by Smartphone demand and corrective steps taken on supply side.

Two different views

Jefferies cut its price target on Micron Technology, Inc. (NASDAQ:MU) from $45 to $40 based on the expected pricing weakness. Meanwhile, RBC too had cut price target of the company to $40 from $44. RBC said that the company’s assumption about a faster transition to 20-nanometer is overly aggressive. However, RBC analyst Doug Freedman said that Micron Technology, Inc. (NASDAQ:MU) remains a longer-term play. It is due to favorable changes taking place in the memory industry, but oversupply and demand cycle weakness pose a risk to it, he said. Meanwhile, Baupost Group has cut down its stake in Micron Technology, Inc. (NASDAQ:MU) to 19,705,035 shares in the fourth quarter of 2014. The move was driven by underperformance of the company’s DRAM business.

Despite the wide variations in analysts’ views, Micron Technology, Inc. (NASDAQ:MU) ended the previous session up by 2.25% to $28.68.

 

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Scott Coper

Scott Coper

Coper graduated from the University of Chicagi with majors in political science and journalism.