Mizuho Analyst Vijay Rakesh downgraded Micron Technology, Inc mu to neutral from Buy with a price target of $56, down from $75. Rakesh downgraded Western Digital Corp WDC to neutral from Buy with a price target of $40, down from $62.
Recent reviews show “steeper” DRAM and NAND memory price declines in the December quarter and first half of 2023. He acknowledged increasing NAND headwinds, with YMTC gaining market share and adding significant capacity, potentially fueling iPhone14 and a major surge Suppliers of Oppo, China, leading OEMs.
Rakesh also accepted increasing DRAM headwinds, with weaker DDR5 adoption and slower hyperscale ramps. Critical data center and server markets are beginning to show weakness as demand in China and Europe slows and CPU/GPU ramps slow.
Rakesh sees slowing consumer and hyperscale demand and high inventory levels as headwinds for businesses, despite their healthy execution with a robust and industry-leading storage portfolio and upgraded 22TB hard drives.
Rakesh said weak macro, consumer demand, high inventories and continued supply growth imply higher downside risk over the next 4-6 months.
Wells Fargo Analyst Aaron Rakers cut Micron’s price target to $75 from $90 and maintained an overweight position.
Micron’s upcoming Q4 earnings lineup looks very damaging as DRAM and NAND industry fundamentals continue to weaken. As in the last quarter, Rakers reduced its forecast significantly/far below Street’s expectations.
However, Rakers said the cuts to total revenue and EPS estimate would matter less than Micron’s comment or investor sentiment about a fundamental bottoming, Micron’s 2023 capex guidance and inventory.
Price promotion: MU shares traded up 1.32% to $51.47 on the last check Wednesday.
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