John, that rules! It does seem curious that Niles' road to $200 somehow now seems to have a possible detour "back to the mid $30s".
Just goes to show you how brain-dead the financial press really is that no financial writer would take that PR or research note and do what you did.
He makes no mention of the $200 price target in his report - one way or another. Not surprising.
Obviously he's not going to go out of his way to point out that the change is a two-rung drop on the BBRS ladder either.
Here are some of his alleged insights:
Pricing following the end of the Japanese fiscal year-end continues to fall and now is in low $7s. Our belief has been that prices would firm following the end of the Japanese fiscal year. We were wrong...
Why were you wrong Dan? Could it have something to do with some DRAM players engaging in "predatory production"?
...Prices have continued to fall and are now in the low $7s and falling. DRAM inventory also seems to be increasing slightly.
This seems to be primarily a supply problem, but with DRAM unit demand also slightly less than we would have anticipated. Given what has happened recently in the PC industry (See April 12 th downgrade of Computer Hardware industry), this is not that surprising, in our view...
Congratulations for successfully linking DRAM demand to "what has happened recently in the PC industry". The reason this link was made now, as opposed to back when you were out their cutting CPQ, HWP, INTC and MUEI would be what exactly?
We believe that at current prices many vendors are once again heading toward break-even profitability. This is good for the industry as other vendors should start to exit the market, which ultimately will help supply....
Well, again, isn't it possible that the top vendors realize this and are intentionally turning up the heat just for that reason? Is it possible that the price deterioration is "blowback" from this strategy?
...We believe that by the summer, several more vendors should have dropped out (primarily Japanese) and that demand should start to pickup before back-to-school. This should help DRAM pricing once again, in our view. As a result, we anticipate becoming more bullish around August...
Define "dropped out"? Is outsourcing production to Taiwan "dropping out?"
As for August, becoming bullish in the fall at a point where MU appears to be well off its peak makes sense.
We are lowering our estimates from $0.23 to $0.07 for Q3, from $0.75 to $0.24 for FY99 and from $3.00 to $1.88 for FY00. We believe consensus estimates will have to follow suit. We believe the stock could move back to the mid $30s in the near-term and as a result are lowering our rating to Long-Term Attractive from Strong Buy.
Mr. Niles, did you or did you not raise your FY99 estimates on Micron Technology from $0.70 to $0.75 on or about March 23rd, immediately preceeding the release of MU's 99Q2 earnings?
And sir, didn't you also raise FY00 to $3.00 from 2.75 at that time?
I ask because I didn't see that mentioned in your PR.
Also, and correct me if I'm wrong sir, but weren't you quoted recently somewhere as opining that MU was your "best idea"?
So is it still your "best idea", despite lowering your ratings 2 rungs?
Is your 2001 price target still $200, despite cutting your estimates for FY99 and FY00"?
Must be nice to hide behind PR's and research notes.
Good trading,
Tom |
