Wells Fargo Securities Raises Micron Technology (MU) Estimates

Wells Fargo Securities analysts David Wong, Brian Cutlip and Amit Chanda reiterated their Outperform rating for shares of Micron Technology, Inc. (Nasdaq: MU), with a valuation range of $11 to $13.

The analysts noted that DRAM and NAND should be more profitable since production costs were down 7% sequentially for DRAM and 6% for NAND.

The analysts increased their sales estimates for the May quarter from $1.7 billion to $2 billion and expected fiscal year 2010 revenue of $7.9 billion, up from their previous estimate of $6.9 billion.

The Wells Fargo Securities analysts wrote, "over the last few years Micron has successfully diversified beyond commodity DRAM to establish substantial businesses in specialty DRAM, NAND flash, and image sensors. We believe that solid growth in the computer space will drive DRAM growth over the next several years. We view NAND flash as a segment that has high growth potential given the many new applications that NAND flash is used for, including music storage and solid state memory drives. However, to remain competitive in the memory markets a relatively high level of capital investment is needed."