Wednesday’s Market Insights: Micron Technology, Inc. (MU), Yahoo! Inc. (YHOO), Twitter Inc (TWTR), Chipotle Mexican Grill, Inc. (CMG)
By Kate George
Micron Technology, Inc. (NASDAQ:MU) slipped 2.11% in pre-market trading down to $16.73 after Intel’s announcement that it will invest up to $5.5 billion in manufacturing semiconductors, specifically NAND chips, in China. NAND chips have experienced severe supply and demand fluctuations, negatively impacting the semiconductor sector at large. Upon the news, analyst Rajvindra Gill of Needham downgraded Micron from Strong Buy to Hold and removed his price target, noting that Intel’s investment adds volatility and uncertainty to the market. He explained, “With pricing pressure already present in DRAM, we see too much uncertainty surrounding MU to recommend accumulating shares at this point.” There have been several mergers and acquisitions in the semiconductor sector, which have contributed to volatile NAND prices, and Gill believes “MU could be left the last one standing when the M&A stops staring down significant competitors.” According to the 25 analysts polled by TipRanks in the last 3 months, 19 are bullish on Micron; 2 are bearish; and 4 are staying on the sidelines. The average 12-month price target for the stock is $22.09, marking a 29% potential upside from where shares last closed.
Yahoo! Inc. (NASDAQ:YHOO) slipped 1.68% in pre-market trading down to $32.28 after the company posted disappointing earnings yesterday after market close. Yahoo posted EPS of $0.15 on revenue of $1.23 billion, compared to Wall Street expectations of $0.17 and $1.26 billion, respectively. The company cut its fourth quarter outlook to revenue between $1.16 billion and $1.20 billion, missing the analyst estimate of $1.33 billion. After earnings, Neil Doshi of Mizuho Securities downgraded the company from Buy to Neutral and lowered his price target from $40 to $37. After Yahoo announced earnings, Doshi had several concerns about the Aabaco spin and decelerating search ad revenue. The analyst adds, “With materially harder comps for display and search gross revenue in 1H16, we could see significant pressure on revenue. Without any near-term catalysts for the core biz, harder comps, and low margins, we are downgrading to Neutral.” According to the 26 analysts polled by TipRanks in the last 3 months, 18 are bullish and 8 are staying on the sidelines. The average 12-month price target for the stock is $43.17, marking a 31.50% potential upside from where shares last closed.
Twitter Inc (NYSE:TWTR) is down 4.37% in pre-market trading to $29.56 after the social media company was downgraded by Brian Nowak at Morgan Stanley from Equalweight to Underweight. Nowak cut his price target from $36 down to $24 and commented that the company is experiencing “limited user growth and declining engagement.” He also blasted the company’s advertising efforts, stating that there is lackluster demand from advertisers to use Twitter and the platform already has “high ad load and high ad pricing.” The analyst claims that the Street does not account for these challenges and that the company is in fact overvalued. Nowak does not have a success rate or an average return rating the stock because he has only iterated Equalweight ratings since 2013. According to the 31 analysts polled by TipRanks over the last 3 months, 16 are bullish on the stock, 2 are bearish, and 13 are staying on the sidelines. The average 12-month price target for Twitter is $40.56, marking a 31% potential downside from where shares last closed.
Chipotle Mexican Grill, Inc. (NYSE:CMG) shares fell 7.17% in pre-market trading down to $655.02 after the company posted earnings that fell below analyst’s expectations. Yesterday after market close, the fast-casual dining chain posted earnings per share of $4.59; below the analyst consensus of $4.62. Revenue was in-line with expectations at $1.22 billion. Analysts were also quick to pick up on decelerating same stores growth. In the third quarter, Chipotle posted same store sales growth of 2.6%. Although this figure beat estimates of 2.4%, it adds to a downwards trend that started in Q3 2014. Chipotle rapidly gained popularity over the last few years and now its metrics are struggling to keep up with its prior exponential growth. As of this writing, TipRanks has polled 10 analysts on Chipotle in the last 3 months. Of which, 6 are bullish on the stock and 4 are staying on the sidelines. The average 12-month price target for the stock is $782.60, marking a 11% potential upside from where the stock last closed.