New Street downgrades Micron on risk of multiple compression

New Street downgraded Micron (MU) to Neutral from Buy with a $190 price target. Demand for high bandwidth memory is ramping, which should drive earnings for Micron in the coming quarters, the analyst tells investors in a research note. However, New Street says Micron shares trade at “peak multiples” while the earnings beats will offset by continued multiple compression, which is consistent with past cycles. This will drive a “muted” performance for the stock, contends the firm. New Street recommends TSMC (TSM) for AI exposure with less valuation de-rating risk.