By Sam Boughedda
Barclays analyst Tom O’Malley cut the firm's price target on Micron Technology (NASDAQ:MU) on Tuesday, maintaining an Overweight rating.
The analyst told investors that consumer end markets are weakening, which "likely is contributing to the decline in pricing across both NAND and DRAM."
"We haven’t seen hard indications of weakening in Data Center, but we worry that a correction will follow the broad-based markets potentially even later this year," wrote O'Malley.
The analyst acknowledged that the company continues to outperform the industry on cost declines on the “front-end” but they believe "worsening logistics/freight likely weigh on the back end, making cost declines more difficult."
As a result, Barclays cut forecasts to reflect the weakening pricing environment and reduce some cost declines, adding that it is likely the first of many across the group.
"We think this is a much better company than it was last cycle but struggle with how the name works over the coming 6 months with additional end markets turning over. Long term, we do think the stock can work again but we see no catalyst near term," concluded O'Malley.