Market Update: Micron Technology Inc (NASDAQ:MU) – Micron: Get Set for a Bumpy 3-D NAND Ride, Says Morgan Stanley

[at Barrons.com] – Shares of DRAM and NAND flash memory chip maker Micron Technology (MU) are down 21 cents, or 1.8%, at $11.70, as analysts continue to asses the company’s fiscal Q3 report last Thursday, which offered a disappointing outlook that caused a big drop in the shares. Morgan Stanley’s Joseph Moore, who has an Overweight rating on the stock, and an $18 price target, writes that despite the disappointment, “DRAM execution is actually OK” but “NAND conversion” is the “negative – and more temporary – factor.” The big worry at the moment is how low NAND margins go, he writes: With NAND trade revenues declining by 17% sequentially in the May quarter, and our expectations for another 11% decline , we think that the NAND shortfall vs. our much too optimistic expectations actually drives a $0.40 EPS shortfall in the August quarter, offset by better DRAM. Read more on this. Micron Technology, Inc. (MU) , with a current value of $12.16B, started the session at $11.76. A quick look at the market, the company’s stock traded between $11.50 and $11.85 and has traded between $9.31 and $28.62 over the past 12 months. MU shares are currently priced at -198.50x this year’s forecasted earnings, which makes them relatively inexpensive compared to the industry’s -0.40x forward p/e ratio. Consensus earnings for the current quarter by the 22 sell-side analysts covering the stock is an estimate of $-0.18 per share, which would be $0.37 better than the year-ago quarter and a $0.02 sequential increase. Furthermore, our analysis shows the full-year EPS estimate to be $-0.06, which would be a $2.75 setback when compared to the last year’s annual results. The quarterly earnings estimate is based on a consensus revenue forecast of the current quarter of $3.08 Billion. If realized, that would be a 14.44% decrease over the year-ago quarter. More recently, Nomura upgraded MU from Reduce to Buy (Jun 23, 2016). Previously, Susquehanna upgraded MU from Neutral to Positive. Investors should keep in mind is that the average price target is $14.86, which is 26.36% above where the stock opened this morning. See more in (NASDAQ:MU) Similar Articles: Stock Update: Micron Technology Inc (NASDAQ:MU) – Micron Drops 6%, But MKM Sees Improving NAND, DRAM Trends Company Update (NASDAQ:MU): Micron Technology CEO Mark Durcan to Present May 25 at JP Morgan Technology, Media and Telecom Conference Market Update: Micron Technology Inc (NASDAQ:MU) – Jim Cramer — There’s No Case for Buying Micron