Micron Associate Micron Analysts Still Supportive; Investors, Not So Much - Posterous

Micron Technology shares are down today about 6.6% at $5.72, as investors have a different takeaway from last night’s earnings report than most of the Street.



The results missed Street views, by a lot: The chip maker posted a loss of 32 cents a share, while consensus was a loss of only 20 cents. This was the capper for a stock that had slid 23% the past 12 months prior to the report.



But most analysts on the Street are still relatively sanguine about the company.



“We believe that Micron is executing well in a consolidating memory industry,” Roth Capital analyst Krishna Shankar wrote. She expects demand will improve and sees stable pricing for DRAM and NAND flash in the second half of the year. She maintained buy rating, and has a $12 price target on the shares.



While acknowledging how weak the sector is, MKM Partners’ analyst Daniel Berenbaum said the expected Elpida acquisition could be a boon. “We don’t see much downside to the stock, but realistically our bullish thesis now relies more heavily on either the consummation of the Elpida acquisition or its eventual liquidation,” he write. “Our analysis still suggests that consensus is far too negative on the deal.” He rates shares a buy, too, with an $11 price target.



Nomura was more circumspect. “Micron is optimistic about the back half of the year, but the guidance implies more risks to consensus estimates,” the firm wrote. “In addition, comments on NAND pricing are a negative read-through for SanDisk in the near term. We are staying on the sideline until we see more evidence of end demand improving.”



Nomura has the stock at neutral, with an $8 price target.



Investors, judging from the stock action, weren’t happy with the report or its implications. Micron’s rivals are suffering as well. SanDisk is down 3%, and LSI is down 5.4%.



Micron swung to a third-quarter loss, amid a weak flash-memory market marked by falling prices for NAND memory chips, high supply, and lower demand. The company posted a loss of $320 million, after earning $75 million a year ago, with sales up 1.5% to $2.17 billion.



The company said the flash memory market is still weak, with pricing down steeply quarter over quarter. Such memory is used in devices such as smartphones, tablets and solid-state drives for PCs, and market saw an oversupply of SSDs after devices with the storage didn’t sell well. » Micron Associate Micron Analysts Still Supportive; Investors, Not So Much - Posterous