Morgan Stanley Lowers Investment Rating and Target Price for Micron
Negative Outlook on DRAM-Related Companies Including Samsung Electronics and SK Hynix
Counterarguments on Overselling and Low-Price Buying Also Emerge
[Asia Economy New York=Correspondent Baek Jong-min] Shares of DRAM semiconductor-related companies also plunged in the U.S. stock market. Concerns over the worsening DRAM semiconductor market, which dragged down Samsung Electronics and SK Hynix semiconductor stocks, have now affected Micron as well.
On the 12th (local time) in the New York stock market, Micron's stock closed at $70.25, down 6.3% from the previous day.
Micron's stock price fell to around $68 during the session but barely held above $70. Micron's stock has plummeted 15% just this week, hitting its lowest level since December last year.
On the same day, stocks related to DRAM semiconductors such as Western Digital, Applied Materials, and Lam Research also fell sharply.
Bloomberg reported that the decline in Micron's stock price was due to investment bank Morgan Stanley lowering its investment rating from 'Overweight' to 'Equal Weight' on expectations of a sluggish DRAM market, and also reducing the target price from $105 to $75.
Joseph Moore, a Morgan Stanley analyst, explained the reason for the rating change, stating that the DRAM market is expected to turn downward. Micron ranks third in the global DRAM market share after Samsung Electronics and SK Hynix.
Earlier, Morgan Stanley downgraded its investment ratings for Samsung Electronics and Hynix semiconductors in a report titled "Memory, Winter is Coming," which triggered a sharp decline in the two companies' stock prices.
There are also counterarguments that concerns over the DRAM market deterioration are excessive. Rosenblatt Securities claimed on the same day that worries about the DRAM market decline are overblown. Hans Mosesmann, a Rosenblatt analyst, recommended buying related stocks, saying the DRAM cycle will expand and grow further.
He explained that Micron's move to pay dividends also expresses confidence in the market situation.
Dan Foreman, an MKM Partners analyst, also analyzed, "Micron's stock has entered an oversold state due to Morgan Stanley's downgrade, and the time of great concern is a buying opportunity."
According to Bloomberg's aggregation, over 80% of securities firms analyzing Micron have issued buy recommendations, while none have recommended selling. The average target price is $115, which is 65% higher than the current stock price.
In contrast to the decline in DRAM companies, stocks of non-memory semiconductor companies such as Nvidia, Broadcom, and Qualcomm rose. The prevailing view is that the shortage of non-memory semiconductors, which began after COVID-19, will continue for the time being.
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