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Micron Expertise (NASDAQ:MU) shares fell 8% on Friday as funding agency Piper Sandler downgraded the reminiscence chip maker, citing its “outsized publicity” to shopper electronics.
Analyst Harsh Kumar lowered his score on Micron (MU) shares to underweight from impartial and slashed his per-share worth goal to $70 from $90, noting the corporate’s publicity to cellular, PCs and “different shopper end-markets” are topic to weaker developments, whereas the dynamic random entry reminiscence, or DRAM market, of which the corporate will get 70% of its income from, has began to see worth declines.
NAND pricing, which Micron (MU) additionally has publicity to, has seen a deceleration previously few months, Kumar added.
“Whereas we do really feel the corporate has finished an excellent job to cut back its value construction and stay financially disciplined, we proceed to view reminiscence as largely a commodity market in comparison with the remainder of our universe,” Kumar wrote in a word to shoppers.
“In consequence, we do really feel Micron is prone to underperform, and we choose differentiated corporations with much less shopper publicity.”
Kumar identified that Micron’s (MU) publicity of higher than 50% to shopper markets is larger than many different semiconductor corporations, and with some weak spot within the cellular and PC markets, it is doubtless there might be “extra strain on the corporate.”
Micron (MU) can be not as uncovered to the automotive market, which Kumar stated occasions like rising charges, a slowing macro and the potential of extra stock could also be a priority.
Presently, the analyst is barely assured in Micron’s (MU) information middle enterprise, which includes lower than 30% of its income.
On Thursday, it was reported that Taiwan Semiconductor (TSM) was trying to improve its publicity to reminiscence chip makers, together with Micron Expertise (MU).
Analysts have been overly bullish on Micron’s inventory (MU). It had a median score of Robust Purchase from Wall Road analysts, and a barely much less enthusiastic BUY from In search of Alpha authors. Conversely, In search of Alpha’s quant system, which persistently beats the market, rated Micron a STRONG BUY.
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