Summit Research and Sterne Agee see buying opportunity in Micron Technology's (NASDAQ: MU) share pullback.
"Opportunity To Load Up On MU"
As Micron shares fell as much 3.8 percent in Wednesday's trading, Summit Research analyst Srini Sundararajan advised investors to "use this opportunity to load up on MU if your time-frame is anything over 3 months."
Summit, which holds a Buy rating on shares, admits that there is near-term concern with respect to the company.
The analyst commented, "Truth is, there is a short term concern on MU with respect to NAND margins. But that gets fixed within a quarter. On DRAM, Samsung currently goes hat in hand begging for capacity and chips from Micron and SK Hynix, its frenemies. Samsung has had one hand tied behind its back competing with Apple without having enough DRAM capacity. If they did not increase capacity to fend for themselves, they would be foolish."
Samsung Is Unlikely To Add DRAM Capacity
Analyst Vijay Rakesh from Sterne Agee also noted an optimal Buying opportunity for long-term investors. Rakesh reported that the recent pullback offers shares at an attractive level as "there is little reason for Samsung to add DRAM capacity."
Sterne Agee remarked that it doesn't expect memory OEMs to add supply to affect margins, given profitability concerns at Samsung.
The firm reiterated a Buy rating and $40.00 price target on Micron seeing a positive long-term growth outlook on mobile DRAM and PC demand.
Shares of Micron fell as much as 3.8 percent on Wednesday to $31.86. Shares are currently trading at $32.76.
Sterne Agee's price target suggests a 21.65 percent premium to current trading levels.
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