Micron pops as GS maintains buy on 'favorable risk/reward' despite DRAM, NAND slowdown
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Micron Technology (NASDAQ:MU) rose on Tuesday as investment firm Goldman Sachs maintained its buy rating on the semiconductor company, citing a "favorable risk/reward," even as the NAND and DRAM markets start to slow down.
Analyst Toshiya Hari noted that both the NAND and DRAM -- or dynamic random access memory -- markets have weakened due to a slowdown in consumer PC and smartphone markets, but there are slow signs of "demand moderation" among enterprise manufacturers and China-based concentrated solar projects.
Nonetheless, Micron (MU) shares could still revert to the firm's $86 per share price target, implying 54% upside from current levels, "over the medium term."
Micron (MU) shares rose slightly more than 2% to $57.04 in mid-day trading on Tuesday.
Hari went on to note that Goldman expects an 11% year-over-year decline in PC units in 2022 and now expects zero growth in smartphones, down from a prior outlook of 6% growth. 
"Given above-average exposure to PCs, smartphones, and other consumer products (e.g. retail flash, external SSD), unsurprisingly, our recent DRAM and NAND industry checks have nearly universally come back negative both in terms of bit shipments and blended [average selling prices]," the analyst wrote in a note to clients.
For the DRAM market, Goldman now expects 12% and 15% year-over-year growth in 2022 and 2023, down from a prior outlook of 17% and 20%, respectively. 
For Micron (MU), this mean the firm now assumes [quarter-over-quarter] changes in blended [average selling prices] of -7%, -9%, -7% and +6% for the next four quarters, compared to previous assumptions of +5%, +7%, +3% and -8% [quarter-over-quarter], respectively.
For NAND, the firm now models 32% and 36% growth in 2022 and 2023, down from a prior outlook of 38% and 42%, respectively.
As it pertains to Micron (MU), this means quarter-over-quarter blended average selling prices in the next four quarters of +2%, -4%, -8% and -6%, compared to a prior outlook of +3%, -1%, -7% and -7%, respectively.
Earlier this month, investment firm Summit downgraded Micron (MU) shares, noting that the firm no longer expects the memory market dynamics to turn favorable in the second half and the company could also see gross-margin headwinds.