Drexel Hamilton's Richard Whittington has upped his Micron (MU +3.1%) PT all the way to $50 from $30. He expects DRAM prices to keep rising this year and next thanks to a favorable supply/demand balance, and expects DRAM margins to eventually hit 50%.
Micron had a Feb. quarter gross margin (covers both DRAM and NAND flash sales) of 34%. Shares rallied on Thursday following SanDisk's Q1 beat and margin guidance hike, and are once more close to a 52-week high of $25.68.
India's Supreme Court ends a 19-month ban on the mining of iron ore in the state of Goa, allowing mining to begin again but at a restricted level of 20M metric tons/year.
The additional supply from Goa would add to an expected surplus of iron ore this year, as big mining companies such as Rio Tinto (RIO -0.4%) and BHP Billiton (BHP +0.1%) boost production while demand from top consumer China slows.
Goa, India's largest producer of iron ore, accounted for about half the country's iron ore exports until the ban was imposed.
Shares of Sesa Sterlite (SSLT +2.9%), India's largest private iron ore miner, open higher on news that the ban had been lifted.
Walter Energy (WLT) -3.4% premarket after Goldman Sachs downgrades shares to Sell from neutral with a $5 price target, down from $9, citing a more negative view of met coal pricing and more positive thermal price forecast.
Three factors underpin the Sell rating: the firm's EBITDA estimates are 59% and 35% below consensus for 2014 and 2015 given its met price view; it believes WLT's $250M asset sale goal will be difficult to achieve; and at current met prices, WLT may face a potential liquidity challenge in two years given negative free cash flow.
Goldman raises its rating on Arch Coal (ACI) to Neutral from Sell to reflect its more constructive thermal coal price outlook.
Nano cap Prosensa Holding N.V. (RNA) is up 28% premarket on light volume apparently riding on Sarepta's coattails.
Prosensa has its own product candidate, drisapersin, for Duchenne Muscular Dystrophy. A Phase 3 clinical trial failed, however, to meet its primary endpoint of demonstrating a statistically significant or clinically meaningful treatment difference compared to placebo. The drug also failed to meet the majority of its secondary endpoints.
Based on updated guidance from the FDA regarding an early approval pathway for eteplirsen, Sarepta Therapeutics (SRPT) plans to file an NDA by the end of 2014.
The agency provided specific examples of additional safety and efficacy data for Duchenne muscular dystrophy that would enhance the acceptability of the NDA. The company will conduct several open label confirmatory studies later this year on patients with exon-51 amenable genotypes.
The company plans to conduct three studies: 1) ambulatory patients between the ages 7 and 16 years who can walk a minimum distance, 2) patients younger than 7 years, 3) DMD patients who cannot walk a minimum distance or who are non-ambulant.
The firm also plans to start a placebo-controlled study with one or more if its follow-on DMD exon-skipping drug candidates by year end.
Pro-Russian protesters, many of whom are armed, have refused to vacate administrative buildings they have occupied in eastern Ukraine despite an agreement between the government, Russia, the U.S. and EU to "de-escalate" the crisis.
Under the deal, the buildings were to be vacated and armed militias disbanded.
Despite the continued standoff, Russia's Micex index is +2.2% in response to the agreement. The USD-RUB is +0.1% at $35.568.
After underperforming yesterday in response to a mixture of in-line and soft outlooks from Intel, ASML, and Linear, chip stocks bounced back strongly following more encouraging numbers from foundry giant TSMC, NAND flash giant SanDisk, and well-diversified Cypress.
TSMC, seen as a bellwether for chip demand due to a client list that includes most of the world's top fabless chipmakers (Qualcomm, Broadcom, MediaTek, Xilinx, etc.), beat Q1 estimates, issued strong Q2 guidance, and reported seeing healthy sales from mobile clients, and for its advanced 28nm process node.
Though pre-IPO demand was muted (leading to conservative pricing) and initial trading wasn't impressive, Weibo (WB +19.1%) and Leju (LEJU +18.6%) closed up strongly. The former is now worth $4.05B (21x sales), and the latter $1.57B (4.7x sales).
Sina (SINA +6.7%) managed to follow Weibo higher, but E-House (EJ -5%) couldn't get a similar lift from Leju.
Chinese Internet companies with upcoming IPOs - the list includes JD.com, Jumei.com (JMEI), and Cheetah Mobile - are likely breathing sighs of relief.
TSMC (TSM +2.8%) has guided for Q2 revenue of NT$180B-NT-$183B ($5.97B-$6.07B), well above a $5.61B consensus. Gross margin is expected to be in a range of 47.5%-49.5%, after coming in at 47.5% in Q1 (+170 bps Y/Y).
TSMC states strong mobile chip demand contributed to its Q1 beat, which follows a March guidance hike, and that it's also benefiting from inventory restocking and "better performance and higher yield and reliability" for advanced process nodes.
28nm wafers made up 34% of Q1 revenue, and 40/45nm wafers 21%.
UBS' William Dong has upgraded shares to Buy, and thinks strong demand for 4G smartphones (have higher chip content than 3G phones) is giving the foundry a lift. He expects 10%-12% Q/Q Q3 revenue growth as orders for Apple's A8 CPU ramp, and 3%-5% growth in Q4.
At the same time, Dong expects TSMC to see a more "balanced pricing environment" in 2015 as smaller foundry rivals such as Samsung try to take share.