Favorable Conditions At Micron Technology Bolstered By These 3 Items

In a report published Tuesday, Wedbush Securities analyst Betsy Van Hees reiterated an Outperform rating and $40.00 price target on Micron Technology, Inc. (NASDAQ: MU).

In the report, Wedbush Securities noted, "MU highlighted favorable memory market conditions from consolidated suppliers with 1) sufficient scale and return-focused, 2) low supply growth with limited new capacity and slowing migrations, and 3) diversifying demand. MU sees strong demand for DRAM in mobile phones and servers, but expects industry supply bit growth to slow to 25% Y/Y (from 33% CAGR 2010-2014) due to technology complexity and wafer production stable/declining over time."

The report continued, "MU sees NAND constrained over the near to long term given diverse end-market demand drivers and complicated 3D transitions and expects industry supply bit growth to slow to 38% Y/Y (from 55%) largely due to 3D transition absent wafer capacity additions."

Micron Technology closed on Friday at $31.85.