Najarian sells Micron’s stock on Morgan Stanley downgrade

Micron Technology Inc (NASDAQ: MU) shares slid about 8% on Thursday after Morgan Stanley downgraded the stock from ‘overweight’ to ‘equal weight’. The investment bank slashed its price target from $105 to $75 this morning, citing supply was catching up to demand, dulling prospects for further increase in pricing.

In the industry report titled, “Memory – Winter Is Coming”, Morgan Stanley’s Joseph Moore said Micron might still report strong results for the August quarter, but the stock was likely to remain range-bound as DRAM prices start to decline. The Idaho-based company topped Wall Street estimates in the prior quarter (Q3).

Najarian’s remarks on CNBC’s “Halftime Report”

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Moore’s call also made optionMONSTER co-founder pull out of his investment in the Micron stock on Thursday. On CNBC’s “Halftime Report”, Najarian said:

“I overstayed my welcome in this one. I had to cut the losses on these calls. They’ve been buying puts the last couple of days. Today, it started accelerating again. They’re buying the September’s 6250 puts today with stock at 70 bucks. So, they’re predicting another $8 decline. That’s not one I want to hold.”

Wall Street disagrees with Morgan Stanley

Morgan Stanley’s call, however, is far from being a Wall Street consensus. According to Bloomberg, over 80% of the research firms have a buy rating on Micron with an average price target of roughly $115, which translates to an about 65% potential upside from the current share price.

Also on Thursday, Rosenblatt Securities’ Hans Mosesmann said Micron’s confidence was evident when it instituted a dividend for the first time last week.

While MKM Partners sees the recent sell-off in the Micron stock after Morgan Stanley’s downgrade as a buying opportunity, Stephen Weiss of Short Hills Capital Partners said during the same interview with CNBC that he would much rather buy Qualcomm on dips.