But today, the stock jumped as much as 6.6% thanks to an upgrade from Citi analyst Glen Yeung. In a fresh research report, Yeung upped Micron from hold to buy while keeping the price target steady at $7 per share.
The upgrade also sparked trading interest across Micron's sector. SanDisk
Yeung sees plenty of downside risk but also a very attractive price. Another recession would sink the stock like a battleship anchor, but "house economic views" at Citi point in the other direction; if that's correct, Yeung sees a 79% upside potential, which works out to about $9 a share.
So we're talking about $7 as a risk-adjusted target. The biggest risk out there is a pending antitrust lawsuit, where Rambus is seeking treble damages on about $4 billion of estimated lost revenue, or $13 billion in all. Yeung expects a settlement for no more than $900 million. That would be manageable with Micron's cash-flow potential and cash in the bank. A full $13 billion damages judgment, on the other hand, would do some serious harm.
Micron's rewards outweigh the risks today in Yeung's opinion, and I would agree. In our free report "5 Stocks The Motley Fool Owns -- and You Should, Too," we highlight another high-tech leader that our analyst believes is one of the strongest ways to profit in smartphone growth in China and beyond. Get your copy of the report -- it's free!