Micron's DRAM Trends, Cost Leadership, Buyback Potential Win Bullish Sell-Side Initiation

Micron Technology, Inc. MU has moved from a "cash burn" to a "cash return" story in the space of two years, Benchmark said in a bullish Friday initiation note.

The Analyst

Analyst Mike Burton initiated coverage of Micron with a Buy rating and $80 price target.

The Thesis

Burton cited three factors in setting the rating:

There is little evidence that DRAM supply will outpace demand heading into the second half of 2018.
Micron has an opportunity to outgrow the industry thanks to its newfound cost leadership in 3D NAND — whereas before it had been a cost and market share “laggard.”
Burton expects the company to begin deploying its free cash flow toward buybacks in fiscal 2019.

Benchmark is just the latest Micron bull to make comments in recent days. Get full analyst coverage in real time by subscribing to Benzinga Pro.