Micron: Two Downgrades and -20% Return in 5 Days

The last five trading days Micron Technology Inc.(NYSE:MU) shares have been cursed with two Downgrades and losing 20% of their value.  Micron has been outcast by Wall Street, they are the new Gollum of the Semiconductors.

Anytime you see back to back downgrades in the span of a week it makes you wonder if the analysts might actually be on to something, both UBS and Deutsche are down on Micron:

Micron Technology shares have been selling like no tomorrow, each day a new 'support line' has been hit and the question is, when will the bleeding stop for shareholders? 

Back to the analyst Downgrades:
1. UBS analyst Uche Orji cut his rating on Micron Technology (MU) to Neutral from Buy, but is maintaining a $5 price target on the shares.

Orji writes that pricing upside in DRAM is limited; he also says a recent hike in NAND pricing is already in the stock, and that “seasonal softness could ensue.” He also says capital raised by peers will delay further industry consolidation.

2. Deutsche Bank analyst Bob Gujavarty sliced his rating on the DRAM maker to Hold from Buy, trimming his target to $5, from $5.50. He contends that “supply-induced stabilization in memory pricing has now run its course,” and that the stock already reflects what should be relatively benign pricing in the second half. But Gujavarty adds that it is less well understood that rising prices are likely to discourage bit growth, “suggesting forward revenue estimates are too high.” Also figuring into the downgrade, he writes in a research note, are a slower growth rate in NAND flash and a valuation in line with historical levels.

Gujavarty writes that the environment is not likely to support both strong bit growth and improving ASPs. He notes that DRAM spot pricing has increased 60%, with with NAND up 90%. “Customers are likely to respond to higher prices by reducing demand,” he writes. “Survey data suggests a majority of high-end [personal computer] users already have 4GB of DRAM per system and a majority are unlikely to upgrade even at very low prices.”

For the August 2010 year, he sees revenue of $5 billion and a loss of 81 cents a share; the Street is at $6 billion and a loss of 48 cents.

Thanks to the recent selloff and the power of these analyst downgrades, Micron has been falling -- big time. 

Today however Micron did manage to get some positive press regarding becoming the No. 3 DRAM maker again, but it did nothing for shareholders.

Face it, Micron shareholders are in for a rough ride, right now, they feel like Gollum -- kicked to the side and left on their own.  We be nice to them, if they be nice to us.

Don't expect much upside until Micron or the analysts have something nice to say, until then all you get is just...Wicked, tricksy, false!