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Micron Technology's Risk-Reward 'Skews Positive,' Goldman Sachs Says In Bullish Turn

The ongoing weakness in DRAM and NAND pricing is likely to be short-lived, and Micron Technology, Inc. (NASDAQ: MU) seems well-positioned to continue executing on its tech transitions, according to Goldman Sachs.

· 09/14/2020 11:49

The ongoing weakness in DRAM and NAND pricing is likely to be short-lived, and Micron Technology, Inc. (NASDAQ:MU) seems well-positioned to continue executing on its tech transitions, according to Goldman Sachs.

The Micron Technology Analyst: Toshiya Hari upgraded Micron Technology from Neutral to Buy with an unchanged $58 price target. 

The Micron Technology Takeaways: Recent industry checks suggest a potential recovery in DRAM demand in the back half of the year, supported by seasonal strength in smartphones and pull-ins from Huawei, Hari said in the Monday upgrade note.

For both DRAM and NAND, the analyst forecast "muted supply growth going forward," with demand growth outpacing supply growth in 2021.

“MU has underperformed the SOX/SPX by 17pp/15pp over the past 3 months, which to us, indicates that the near-term pricing dynamics are well-understood by the market.”

The stock’s risk-reward “skews positive,” he said. 

“We believe signs of supply discipline on the part of the memory suppliers and price stabilization will serve as potential catalysts for the stock.”

MU Price Action: Shares of Micron Technology were trading 7.09% higher at $49.36 at last check Monday.