Micron Rises to Six-Year High as Chip Prices Stabilize
Micron Technology Inc. (MU), the largest U.S. maker of memory chips, climbed to the highest price in almost six years after analysts at Jefferies & Co. and Credit Suisse AG raised their price estimates on the stock.
The shares advanced 3.8 percent to $13.24 in New York, the highest closing price since July 2007. The stock has jumped 109 percent this year, compared with a 23 percent gain for the Philadephia Semiconductor Index.
Market prices for memory chips, which store information in computers and mobile devices, will remain at current levels or increase as manufacturers such as Micron, Samsung Electronics Co. (005930) and SK Hynix Inc. (000660) have kept production increases in check, Sundeep Bajikar, an analyst at Jefferies, wrote in a research report. He raised his target price for the stock to $18 from $15, while John Pitzer, an analyst at Credit Suisse, boosted the estimate to $20 from $14.
“As memory prices become more predictable, we expect valuation to move higher,” Bajikar wrote in a research report.
A shortage of chips for mobile devices and efforts by Intel Corp. and Microsoft Corp. to counter a slump in personal computers by enabling lower-cost notebooks should bolster revenue for Micron, Bajikar said.
Micron, based in Boise, Idaho, makes dynamic random access memory, or DRAM, which provides the main memory in PCs. It also makes Nand flash memory, chips that provide the storage in mobile devices such as smartphones and tablets.
The company is scheduled to report earnings for the fiscal third quarter on June 19.
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