Loop Capital analyst Betsy Van Hees weighed in on Micron Technology, Inc. (NASDAQ:MU), reiterating a Buy rating and maintaining a bullish stance over the company. She also kept a $27 price target, believing that the corporation is likely to benefit from favorable market conditions in the near term. Consequently, this is liable to return MU shares – which declined 0.58% during the active trading Friday – toward positivity.
Ms. Van Hees believes that Micron Technology is likely to benefit from rising DRAM and NAND prices and tight demand-supply dynamics. This notion will allow the company to successfully steer towards a year-over-year (YoY) revenue and earnings growth during the calendar year 2017 (CY17).
In an updated research note issued to the investors on Friday, Betsy wrote, “With the positive DRAM data points and our industry checks continuing to point to favorable near-term NAND supply/ demand dynamics.” Therefore, she recommends MU investors to take advantage of the stock, given its recent weakness.
The firm’s check further concluded that DRAM spot average selling prices rose about 12% to $3.17 since the start of the year. Moreover, the prices have gained about 23% quarter-to-date. Therefore, the analyst and her team remain optimistic and believe that an upward DRAM pricing momentum suggests a positive indicator. She also expects contract prices to increase in upcoming months to bridge the gap between contract and spot pricing.
Moreover, the analyst noted that Gartner’s PC shipment data indicates that while 4QFY16 shipments declined 3.7% YoY, they increased 5.3% quarter-over-quarter (QoQ). This juncture signals positive news for company’s PC supply chain.
The research firm’s industry checks also suggest a tight NAND supply. The company is likely to benefit from favorable DRAM supply and balanced NAND supply-demand dynamics, as suppliers ramp up 3D NAND fablets during the second half of FY17.