After weeks of making consecutive losses in the market, Micron’s stock appears to have rebounded
In the past thirty days, Micron Technology (NASDAQ:MU) shares have slumped more than 19%, having already fallen 55% this year. The shortfall has been primarily due to the ongoing decrease in global demand for PCs. After weeks of getting beaten in the market, the stock appears to have recovered, and the company's shares, down 27% from last month, began to bounce back on Thursday, and closed at $15.96 yesterday, up 2%.
In a research note sent out to clients and investors, Credit Suisse reiterated its outperform rating and price target of $34. Analysts are of the view that the upcoming contract pricing announcement by DRAMeXchange, scheduled for August 31, will prove a near-term growth catalyst for the company’s stock.
The firm projects that contract prices will decrease by 7.5% on a monthly basis. Additionally, Credit Suisse expects PC demand to improve going into the next quarter, resulting in stable prices.
Earlier this month, Wells Fargo upgraded its rating on Micron from underperform to market perform. Analyst David Wong believes that Micron’s margin stands to expand going forward on the back of improving DRAM prices. At the same time, Mr. Wong highlighted certain risks for the company that could hamper the stock’s movement, including a potential fall in DRAM chip pricing, an unexpected change in Micron’s pricing deal with Inotera, and unrealistically high consensus estimates.
Most investment firms have maintained a bullish stance on Micron’s stock. Out of 35 analysts polled by Bloomberg, 23 gave a Buy rating, while 11 advocate a Hold rating. Only one analyst gave a Sell rating. The average 12-month price target on Micron shares is $26.07.
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