Strong PC Data For June Is Good For Micron Investors

In what could be good tidings for Micron Technology, Inc. MU, Citi said in a note that June notebook ODM shipments rose 17 percent month over month, exceeding expectations. This, according to the firm, comes about as the strength in the PC market continues.

Analysts led by Christopher Danely said second-quarter overall notebook shipments rose 7 percent sequentially, exceeding their estimate of 4 percent and the normal seasonality of 6-percent growth. Quoting an estimate by William Yang, Citi's Asia hardware analyst, the analysts said third quarter ODM notebook shipments would grow 6 percent, in line with seasonality (see Danely's track record here).

Citi believes the continued strength in the PC end market, which consumes 20 percent of the total DRAM, is helping pricing along with limited supply. Additionally, the firm is of the view that strong PC demand is good for Micron, as it is about 25 percent exposed to the PC end market and its checks continue to indicate PC DRAM is on allocation.

"In addition, our checks in the memory channel indicated unanimous belief that DRAM pricing will increase in 3Q17," the firm concluded.

As such, Citi reiterated its Buy rating and $45 price target on the shares of Micron.

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