Analyst Shaves Price Target For Micron And Western Digital To Reflect Industry Weakness

• Mizuho analyst Vijay Rakesh maintained Micron Technology Inc (NASDAQ: MU) with a Neutral and lowered the price target from $52 to $50.

• Rakesh maintains Western Digital Corp (NASDAQ: WDC) with a Neutral and lowered the price target from $40 to $38.

• While memory industry valuations have remained attractive and MU's wafer cuts should help, he believes memory trends near-term are weaker with China COVID restrictions, higher memory supplier inventories, and fab underutilization impacting margins.

• His recent checks into the supply chain show demand weak into 2023 with China COVID restrictions impacting retail traffic and logistics from Beijing to Shenzhen and Shanghai to Zhengzhou.

• His check suggested inventory at Memory suppliers and Server and Hyperscale customers higher (>8-14 weeks).

• His checks also reflected pricing trending as unfavorable.

• He saw fab underutilization as an added headwind to margins.

• As he looks ahead to Micron earnings on December 21, he believes lower ASPs for memory could further pressure the gross margin at MU and WDC in the near term.

• Price Action: MU shares traded lower by 1.47% at $54.31 on the last check Wednesday. WDC shares traded lower by 4.34% at $34.55.

Latest Ratings for WDC

Date	Firm	Action	From	To
Mar 2022	Stifel	Maintains		Buy
Jan 2022	Mizuho	Maintains		Buy
Jan 2022	Barclays	Maintains		Equal-Weight

View More Analyst Ratings for WDC

View the Latest Analyst Ratings

See more from Benzinga

• Western Digital Could See Material Cash Drawdown In 2023, Analyst Says

• Lack Of Supply Cuts From Samsung Could Lead To Higher Inventory Build-Up For Micron, Analyst Says

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