Micron outlook, capex hike spark rally in memory chip makers
Micron Technology Inc. shares soared to a more than 15-year high Wednesday, leading S&P 500 index gainers, after the memory chip maker boosted its outlook following an earnings beat and raised its forecast capital spending, prompting analysts to hike their price targets on the stock.
Micron MU, +8.51% shares closed up 8.5% at $37.09 on heavy volume Wednesday, the stock’s highest close since March 2002, according to FactSet data. Shares are up 69% for the year. By the close, more than 83 million shares changed hands, compared with a 52-week average daily trading volume of 27.3 million shares.
Micron Scores Price-Target Increases After Beat-And-Raise Quarter
Memory-chip maker Micron Technology (MU) received at least seven price-target increases on its stock Wednesday after posting better-than-expected fiscal fourth-quarter sales and earnings late Tuesday. Wall Street firms raising their targets on Micron included Baird, Cowen, FBN Securities, Mizuho Securities, Morgan Stanley, Needham and Susquehanna Financial Group. All have buy ratings, or the equivalent, on the stock.
Needham analyst Rajvindra Gill was the most bullish of the group. He reiterated his buy rating and upped his price target to 76 from 50.
Micron shares jumped 8.5% to close at 37.09 on the stock market today, hitting a 15-year high.”Currently, the stock is trading at a trough multiple on the perception of a ‘peak earnings cycle,’” Gill said in a report. “We assert it should be trading at a market multiple on ongoing earnings growth.
The Party Rages On for Micron Technology
Just about the best-case scenario is playing out for memory chip manufacturer Micron Technology (NASDAQ:MU). Demand for the company’s DRAM and NAND chips is high, supply is constrained, costs per bit are dropping, and prices per bit are soaring. During the fiscal fourth quarter, Micron produced $2.4 billion of net income on $6.1 billion of revenue.
That’s up from just $3.2 billion of revenue and a net loss during the same period last year. Historically, periods of lush profits for Micron have never lasted all that long. Like in any commodity market, a prolonged period of elevated prices encourages capacity expansion, which eventually erases the gap
between supply and demand.
Today's Trading Lesson
How Professional Traders Build a List of Winning Stocks
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Today's Trade of the Day | 9-28-17
LRCX-Lam Research traded to new levels along with many other tech stocks. This trade has potential for fast movement n both directions. The breakout closed above recent levels on solid volume, but the trade could catch you sleeping for a bad loss if you don't have discipline. Game planning a $179.75 buy stop for a 2 day swing trade. Profit target of $188. The down side of this trade is if the breakout doesn't old and big money sells the news. Be quick to exit on a close below $178.
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S&P 500 Performance
Stocks to Trade | Thursday Edition 9-28-17
MU-Micron Technologies Soars. Exhaustion Top in the Russell?
Bullish Momentum: MU, AMAT, LRCX, UTX
Bearish Momentum: ccl, jd, tsla
Bullish Order Flow: UNP, VLO, KORS, C, PSX, LRCX, NVDA, NFLX, PNC, MA, DLTR, DG, BA, EOG, MAR, COST, KITE, HD, AMGN, CELG, MU, ROST, TXN
Bearish Order Flow: wba, mdt, pep,k, agn, khc, momo, dis, mnk
Double Normal Volume: MU, AMAT, BABA, EFX
Inside Days: nvda, qcom, pypl, mcd, cf, gsk, crm, ctrp, cci, fl, bhge, ctsh, juno
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