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

To: Thomas G. Busillo who wrote (26503)	1/14/1998 9:17:00 AM
From: DJBEINO	Respond to of 53903

Headline: Micron Technology: More Good News on Pricing (LEHMAN) MORE GOOD NEWS ON SPOT PRICING . . . DRAMS UP YESTERDAY. DRAM SPOT PRICES WERE UP SHARPLY IN SELECTED CONFIGURATIONS YESTERDAY. IF THIS UPWARD TREND CONTINUES (BEGAN MIDDLE OF LAST WEEK), MICRON SHARES SHOULD CONTINUE TO APPRECIATE NICELY. 16 Mbit DRAM spot prices increased sharply in two of the key configurations used in the PC modules, and in the 1Mx16 DRAM used in set-top boxes and in telecommunications and networking applications. Surprisingly, 64 Mbit pricing has been very stable. If 16 Mbit pricing continues to rise, 64 Mbits should follow. Our February 2QFY98 DRAM price estimates are $2.90 (vs. $3.10-$3.80 fast page/EDO and $3.70 to $4.45 synchronous spot pricing) for 16 Mbit DRAMs and $18.00 for 64 Mbits. We forecast FY98 16 Mbit and 64 Mbit DRAMs to comprise 84% and 5%, respectively, of Micron's DRAM bit production (the remainder being 4 Mbit). A continued rebound in spot prices will push Micron stock higher. However, if this trend proves unsustainable, Micron stock will fall back to recent levels in the low $20s. WE CONTINUE TO BELIEVE THIS TREND IS SHORT IN DURATION AND, THUS, MAINTAIN OUR CAUTIOUS NEAR-TERM OUTLOOK. LONGER TERM, WE REMAIN BULLISH ON MICRON'S PROSPECTS. Of the 16 chip stocks we cover, Micron is 1 of the 5 selling at record low relative sales and book value multiples. During the next two to three years, a move up to $75 seems reasonable as Micron's position of a low-cost producer of high-growth DRAMs is better appreciated (i.e., once Micron makes good money again).