) to neutral from outperform.
Analyst Michael Masdea says he downgraded the memory chip maker for several reasons. He says his Global DRAM model now suggests a 3% oversupply in the second quarter as capital expenditure spending in the second half of 2003 comes on-line in a seasonally weak quarter for personal computers. He thinks pricing expectations are getting aggressive.
Masdea notes there's been a rash of upgrades, and he sees a swing in sentiment following Micron's analyst day as key pieces of the story are better understood. He says with the stock up 40% since the mid-December low, the risk-reward ratio is less favorable. Masdea thinks investors should take some profits after recent strength. He cut the 5 cents fiscal 2004 (Aug) earnings per share estimate to a penny, and sees 32 cents earnings per share in fiscal 2005.