Micron has bottomed out and is set to rebound 50% this year
Micron shares have finally settled for a year of steep losses and should perform better than the broader stock market in 2019, according to BMO Capital Markets.
Analyst Ambrish Srivastava upgraded the summarized inventory to outperform the market performance Monday, telling clients that the broker's dissertation at Micron has changed as stocks cheaper, and unlike expectations for better business fundamentals and cost savings, the analyst set a 12 month target of $ 50, representing more than 50 percent up from Friday's proximity.
"Our reversal in thinking is driven by a combination of the following two factors : Valuation and a structurally more profitable company, which will lead to free cash flow generation even under rather serious scenarios that we model for, "wrote Srivastava.
Micron, which produces memory technology such as DRAM and NAND flash key components in popular solid state drivers ves ̵[ads1]1; has been successful in catching up with larger rivals, including Samsung and SK Hynix, accused ana
"We estimate that at earlier peak, Micron's cost structure is better by about $ 2 billion," Srivastava wrote. "The company has also managed to close the gap in the margins against the larger rivals. We estimate that the gap is lower from 9 percentage points to about 6 points. Micron has been able to cut costs faster than its competitors." [19659003] From a valuation perspective, the chipmakers saw their equity in 2017 and reversed rapidly in 2018 as investors followed a roller coaster ride with interest in crypto competition. The valuation has also given the past two years high expectations of artificial intelligence, machine learning and autonomous driving, promised long-term demand for semiconductors and equipment.
Micron, which saw its share price rise more than 80 percent in 2017, lost more than 22 percent in 2018 among rockers trading and a withdrawal in popular technology stocks. The stock was up 1 per cent in premarket trading after the BMO upgrade.
