MU Stock Dips Despite CEO Optimism

Analysts slashed their price targets on Micron, too

by Lillian Currens

Published on Nov 29, 2018 at 11:30 AM

At last check, Micron Technology, Inc. (NASDAQ:MU) was down 1.6% to trade at $38.08, even after the company's CEO yesterday said fiscal first-quarter earnings would come in at the high end of guidance. He added that Micron is working to assuage the big impact of the U.S.-China trade war and tariffs on gross margins.

MU stock has been through the ringer lately, amid concerns about chip and iPhone demand, as well as antitrust allegations out of China. The equity has dropped more than 40% from its May 30 high of $64.66, finding a line of resistance at its 30-day moving average.

Analysts aren't showing much love for the semiconductor concern, either. Several have issued price-target cuts since the CEO comments, including Mizuho, which cut its price target to $54 from $60. There could be more on the way, too. The consensus 12-month price target of $62.58 is a 61.7% premium to today's trading levels. 

In the options pits, traders have shown a healthier-than-usual appetite for bearish bets of late. The stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 1.15, in the 98th percentile of its annual range, indicating that puts have been bought to open over calls at a much faster-than-usual clip in the past two weeks.

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