CS First Boston downgraded Micron Technology (MU) to neutral from outperform.
Analyst Michael Masdea says he downgraded the memory chip maker for several reasons. He says his Global DRAM model now suggests a 3% oversupply in the second quarter as capital expenditure spending in the second half of 2003 comes on-line in a seasonally weak quarter for personal computers. He thinks pricing expectations are getting aggressive.
Masdea notes there's been a rash of upgrades, and he sees a swing in sentiment following Micron's analyst day as key pieces of the story are better understood. He says with the stock up 40% since the mid-December low, the risk-reward ratio is less favorable. Masdea thinks investors should take some profits after recent strength. He cut the 5 cents fiscal 2004 (Aug) earnings per share estimate to a penny, and sees 32 cents earnings per share in fiscal 2005.