Morgan Stanley’s research team believes that Micron Technology shares have much less trailing in the stock market ahead of what most investment analysts consider. The question is whether the market has already discounted future problems with the falls of recent days, or if the worst is yet to come.
Micron Technology’s share price has fallen nearly 14% on the stock market in the last six sessions. This Monday it also fell around 0.1% in the middle of the session, which left the stock in the area of 70.8 dollars. After the recent declines, the profitability accumulated by the stock has disappeared and presents losses of 6% so far this year.
An image that contrasts, without a doubt, with the all-time high that Micron’s titles set four months ago. On April 12, the stock reached $ 95.59. Since then, it has fallen 25%.
However, it seems that the American company still has a journey on the stock market. The consensus of investment bank analysts collected by FactSet indicates that Micron’s share could reach $ 117.8 in the next twelve months, representing a 66% revaluation from the current price.
For some analysts, it could even reach $ 120, as is the case with John Vinh, from KeyBank Capital Markets; or even the $ 140 that JP Morgan analyst Harlan Sur sets as a target price.
But amid all this display of optimism, it is surprising that Morgan Stanley analyst Joseph L. Moore has lowered Micron’s share price target to $ 75, just when he had seen the stock at $ 105 until then. What led you to make this decision?
On August 12, the Morgan Stanley analytics team forecast a next bearish cycle for DRAM memory microchips, starting in the first quarter of 2020. That was the justification given by the US bank for lowering the recommendation on the stock of Micron from buy to hold.
“It seems that a fairly bad storm has already been discounted, but the recent decline has created a good opportunity for a strategy of sale with cash guarantee while we wait for it to start snowing, ” they say from the firm Parsimony Investment Research, in a published article in Seeking Alpha, in reference to possible additional drops.
On the other hand, Micron announced at the beginning of August that it will begin to pay a quarterly cash dividend, which will be in principle 10 cents on the dollar. Payment will take place on October 18.
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