I hate to say it but I think this stock will go to 42 - 44 near term. Although it's way overvalued based on projected earnings, it looks like it's still a favorite of momentum players. I had expected it to drop to 31 1/2 in anticipation of the earnings report on Monday, but since Micron officials have already announced there will be no loss and have made reference to a surprisingly good balance sheet, I bet the momentum players will attempt a short squeeze. If you look at analysts recommendations as of 11/26, out of 12 that follow the stock, 4 are neutral, 4 hold, 1 accumulate, 1 perform, 1 buy, and 1 strong buy. So if earnings are better than forecast, the odds are that at least one analyst will upgrade. Its doubtful that any will downgrade (except maybe Piper Jaffray). Funds will buy on the recommendation, shorts will panic. And Intel's rosy picture going forward adds a dose of optimism to future earnings for MU.
I don't believe the stock will ever make it to 95 again. DRAM prices are too low and there's excess capacity. Micron won't be able to ramp quickly enough to 64Mb chips and besides, they don't have the cash for it. But mid 40's is a real possibility. BTW, the stock looks like it will break through its most recent high today. Look for some resistance at 39, strong resistance at 44. |
