Morningstar predicts pressure for Micron Technology, Inc. (NASDAQ:MU)

Morningstar is raising the red flag over Micron Technology, Inc. (NASDAQ:MU), issuing a very high uncertainly rating on the stock. In updated comment, Morningstar has predicated its views on Micron’s 4Q2015 results and what is happening in the DRAM market. According to Morningstar, the results that Micron reported for 4Q were in line with its expectations, but that doesn’t mean they were good. The most impressive thing that Morningstar sees in Micron is that the management is trying to broaden revenue sources into areas such as 3D NAND and more.

However, the rating far sees Micron Technology, Inc. (MU) carrying its PC-DRAM woes into fiscal 2016. If anything desirable were to happen in the DRAM market, it is likely to come in the back half of 2016, according to Morningstar. As such, the firm models a challenging fiscal 2016 for the most part for Micron. Morningstar has cut its price target for Micron Technology, Inc. (NASDAQ:MU) to $23 from $25 on the back of the highlighted challenges and more. Micron reported 4Q revenue of $3.6 billion, marking a third consecutive quarterly revenue decline.

On a consensus basis, Wall Street sell-side analysts have a mean target price of $26.642 for Micron Technology, Inc. (NASDAQ:MU). This number is based on the mean estimate from the 28 research firms that recently issued reports on the company.

According to analysts, Micron Technology, Inc. (NASDAQ:MU) is expected to report earnings per share for the current fiscal quarter of $0.48. This is the consensus mean estimate based on the individual covering sell-side analysts’ reported numbers. The company last reported earnings for the period ending on 2015-08-31 of $0.37.

The average broker recommendation is arithmetical average of the individual ratings contributed by sell-side analysts to produce a Consensus Analyst Rating for each stock. On a scale of 1 to 5 where 1 is a Strong Buy and 5 is a Strong Sell, has the stock is ranked 1.69 based on 28 sell-side broker recommendations. Of the 28 analyst estimates, the most bullish sees the stock reaching $40 within the next 12 months while the most bearish analyst sees the stock at $15 within the year.

In looking at the long term growth prospects of the company, sell-side analysts have a consensus mean earnings per share estimate for the current year of $2.22. The high end estimate for this time frame is $3.56 with the low being $1.09. In looking at the next three to five years, the long term earnings per share estimate growth rate for the company is 10%, based on 5 analysts providing projections.

Micron Technology, Inc., is a global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory, as well as other memory technologies, packaging solutions and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products. In addition, the Company manufactures semiconductor components for CMOS images sensors and other semiconductor products. The Company operates in four segments: NAND Solutions Group (NSG), DRAM Solutions Group (DSG), Wireless Solutions Group (WSG) and Embedded Solutions Group (ESG). The Company’s product include NAND Flash Memory, Dynamic Random Access Memory (DRAM) and NOR Flash Memory. The Company’s manufacturing facilities are located in the United States, China, Israel, Italy, Malaysia, Puerto Rico and Singapore.

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