Micron Technology (MU) $Micron Technology(MU)$
MU, as the name implies, is a technology company that produces computer memory and computer data storage but its P/E ratio is relatively far more impressive at 7.43. As if that was already not enough, the company’s dependence on debt is a paltry 15% of its dependence on its own equity. A Quick Ratio of 2.33, on the other hand, covers any short term debt obligations with ease.
MU has a ‘Buy’ consensus based on 26 analyst ratings as of June 14. The consensus price target, on the other hand, is $113 which implies an upside of 92.58%. On June 13, UBS analyst Timothy Arcuri lowered his price target on MU to $115 from $120 but kept a ‘Buy' rating on the stock and continues to view it as his "top idea in semis".
Arcuri said that while the end-market weakness in PC/smartphones is weighing somewhat on short-term DRAM average selling prices, he anticipates very strong pricing support heading into the year 2023 as the industry growth in bit supply is set to compress quite significantly.
On the other hand, Investment bank Piper Sandler downgraded MU to underweight (i.e., sell) due to the concerns about the economy in general and about DRAM prices in particular. (DRAM refers to high speed memory)
DRAM prices are dropping, the analyst warned, and Micron has an "oversized [55%] exposure to mobile, PCs, and other consumer end-markets" that use this form of computer memory. Piper is predicting that DRAM prices will not recover, but rather accelerate their decline as the economy slows down and demand falls. Moreover, Piper is seeing price declines in NAND memory as well (the other big part of Micron's business) for the past three months, StreetInsider.com reports.
To summarize Piper's outlook, the economy is slowing, demand for computer memory is falling and will continue to fall, and this is likely to result in a glut of both DRAM and NAND.
Micron’s highest stock price in history was USD 97.36 per share (14th January 2022) and it is currently trading at USD 55.75 (17th of June 2022). Approximately 57% difference from the all time high.
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