Prudential Raises Rating on Micron Tech to Strong Buy
Prudential Securities upgraded its investment recommendation on shares of Micron Technology (MU ), a maker of computer memory products, to strong buy from accumulate.
Analyst Hans Mosesmann thinks Micron will be the leading indicator going into the second peak of the semiconductor cycle, as it was going into the first peak. He sees anecdotal evidence of spot prices stabilizing and increasing for branded DRAMs. While he does not believe this suggests a sustainable upward move in pricing because sales were of lower volumes, Mosesmann thinks a bottom is forming, and further significant downside limited. He notes that Micron has one of the industry's lowest cost structures and will likely continue to gain share.
The analyst sees EPS of $0.80 in fiscal 2001 (Aug.) and $2.00 in fiscal 2002. He raised his $38 price target to $75.