Micron shares drop after JP Morgan slashes price target on the chipmaker due to Huawei ban

  • AJ.P. Morgan cuts its year-end price target for Micron to $50 from $64 but maintains its overweight rating.
  • Because Huawei accounted for 13% of Micron’s sales in the first half of 2019, J.P. Morgan expects the ban would weigh on the chipmaker for the rest of the year.
  • “Replacing bits sold to Huawei may take some time to normalize on substitution effects,” says analyst Harlan Sur.

Shares of Micron Technology fell Friday after J.P. Morgan lowered its outlook for the chipmaker due to the U.S. restrictions on Chinese telecom giant Huawei, a big customer of Micron.

J.P. Morgan cut its year-end price target for Micron to $50 from $64 on Friday but maintained its overweight rating. With Huawei accounting for 13% of Micron’s sales in the first half of 2019, J.P. Morgan expects the ban would weigh on the chipmaker for the rest of the year.

“Replacing bits sold to Huawei may take some time to normalize on substitution effects,” Harlan Sur, J.P. Morgan’s semiconductor analyst, said in a note Friday. “The shape of the recovery may be negatively impacted by trade tensions with potential demand destruction in consumer segments.”

Shares of Micron fell 2.5% on Friday. The stock has lost nearly 20% in the second quarter amid the escalated trade war…

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