Weak DRAM Pricing Spurs Micron (MU) Cuts at Susquehana

Susquehanna analyst, MehdiHosseini, believes weaker DRAM ASPs drove Micron Technology (NASDAQ: MU) to come in at the low end of guidance for the November quarter.

PC shipments appear to have stabilized but there remains little visibility on when DRAM ASPs would stabilize.

Investors are encouraged to focus on three main catalysts on the horizon:

1) Micron (and Inotera) migration to 2Y node which is expected to account for at least 50% of DRAM bit shipment by the May quarter

2) SAS SSD shipment (which was developed with collaboration with Seagate) and which is expected to gain some traction into the May quarter

3) the new Intel NAND supply agreement (announced in early September 2015) for the wafers manufactured in Singapore and which will provide Micron some margin in 2H16 (vs. zero margins for the NAND wafers Micron has historically shipped out of the Utah fab)

Revised FY16/FY17 EPS estimates of $1.28/$2.09 are now below consensus of $1.31/$2.20.. The price target also drops from $24 to $22. The firm's Positive rating was maintained.

For an analyst ratings summary and ratings history on Micron Technology click here. For more ratings news on Micron Technology click here.

Shares of Micron Technology closed at $14.85 yesterday.

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