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Technology Stocks : Semi Equipment Analysis
SOXX 312.18-0.2%4:00 PM EST
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To: bigchad who wrote (77203)9/27/2017 5:54:03 PM
From: Donald Wennerstrom1 Recommendation

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After today's market action, I want to go back and copy from an earlier post today made on the CFRA outlook for Micron.
CFRA KEEPS HOLD RECOMMENDATION ON SHARES OF MICRON TECHNOLOGY, INC.
9:21 am ET September 27, 2017 (CFRA)

We up our 12-month target by $2 to $37 on peer-discount P/E of 6.2X our FY 19 (Aug.) EPS view to reflect limited earnings visibility.

We raise our FY 18 EPS estimate to $7.66 from $5.69 and start FY 19 at $6.01. MU posts Aug-Q EPS of $2.02 vs. $0.05 loss, beating the $1.84 consensus. Sales rose 10% while margins widened from the May-Q, both better than expected, led by higher volume and selling prices for DRAM and NAND.

Despite the healthy memory landscape and improving prospects for solid state, we are wary of potential pricing declines given industry supply growth in CY 18.

First of all, Micron closed today at 37.09. This is already at the target price estimated for a year from now by CFRA. That says Micron is not expected by CFRA to gain any more in price over the next year, yet they have had a "hold" rating on Micron constantly for well over 5 years.

Now if I were an investor, why would I "hold" Micron for a year and not have any gain? I might as well pull my money out and buy T-Bills given they are so worried about pricing declines given industry supply growth in CY18. I would think they should have a "sell" rating on the company to be consistent with their outlook. There must be better places to put money in the market than "no growth" Micron with a "risky outlook".
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