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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (47075)	7/12/1999 2:11:00 PM
From: sjemmeri	Read Replies (2) \| Respond to of 53903

Analysis from briefing.com: Shares of memory chip maker have had an excellent two week period even though Micron reported fiscal Q3 results in late June that fell short of market expectations. During this period, the stock has appreciated from under $40 to above $50 on reports that spot prices for 64Mb DRAM chips have firmed on increased demand from Asia. However, any type of price increase is always questionable with this company because supply seems to ooze into the market from every corner whenever prices move up. And the latest price movement has stemmed from reports that Micron itself was having production problems that was limited supply. At least once every six months, if not sooner, Micron stock moves higher of reports of firming prices. But each time, the rise in prices does not last for long and the stock again falls to its prior level. Other than the run the stock made late last year on improving market conditions (the stock reached a high of $80 9/16 in late January of this year), the stock has been relegated to the $30-$40 trading range. This time around, the same trading pattern should again emerge, although so far the stock has managed to stay above $50 even though the issues was downgraded this morning. It seems that Brown Brothers Harriman is not sold on the improving inventory story as the firm downgraded the stock from a short-term "neutral" to "avoid" while maintaining its long-term rating at "neutral." In their view, supply is an issue that could continue to dampen prices and further cut into Micron's earnings. On Friday, Merrill Lynch also cut earnings estimates for fiscal year 2000 (from $2.25 to $1.90), but that did not prevent the stock from moving up above $50 as Merrill reiterated its near and long-term "accumulate" ratings. While this is a stock that can move up significantly on expectations, it can also trade lower just as quickly when the momentum behind the stock evaporates. With Intel scheduled to report its Q2 results tomorrow, Micron is likely to rise or fall on the type of picture Intel paints for the overall chip market. Don't be surprised if this issues once again buckles under $40 when the improving picture for DRAM chips does not materialize into greater earnings for Micron. After all, this issue trades at a 25 times FY00 price/earnings multiple, a lofty ratio for a company that has not earned more than $1.55 in more than two years. - RN