Mizuho analyst Vijay Rakesh slashed price targets on Micron Technology, Inc. to $ 95, from $ 113 (66 percent upside), and Western Digital Corp. To $ 68, from $ 72 (44 percent upside), and reiterated a Buy.
He observed that the memory industry update, sentiment, and pricing trends had softened in the last month with weaker PC-handset trends, consumer demand concerns with DRAM softer but NAND worse with weak demand offset by better supply from Kioxia.
He points out that the server is the only bright spot in driving memory demand, and the NAND and DRAM pricing trend in the 2H negative with inventory pressure and consumer demand pause.
It sees MU positioned for upside in 1H22 with stronger than expected trends in key markets, including PCs, Handsets, and Server.
While pricing could see further declines, it saw more modest than typical pricing troughs as industry supply should be disciplined throughout 2022.
WDC has executed well overall. However, he saw NAND trending softer in 2H22 as demand paused for PCs / Handsets and stayed healthy for Servers.
He believed WDC’s NAND business could see a catch-up trade. With solid execution from MU and WDC, long-term secular trends in 5G, and persistent server strength, he provides negative sentiment and macro headwinds to an opportunity to step in.
By Anusuya Lahiri
© 2022 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.
General Chat Chat Lounge