Investing.com — Micron Expertise (NASDAQ:) noticed its shares fall over 4% Thursday after a double downgrade from Exane BNP Paribas (OTC:).

The agency lowered its score on Micron from Outperform to Underperform, citing issues over extra Excessive Bandwidth (NASDAQ:) Reminiscence (HBM) capability and the impression on standard DRAM pricing.

The worth goal was slashed from $140 to $67, reflecting a pointy shift within the outlook for the corporate’s near-term efficiency.

Exane BNP Paribas highlighted potential draw back dangers, stating, “Whereas some traders appropriately anticipate draw back danger to near-term outcomes, we predict Micron will underperform AI friends by means of 2025.”

The financial institution famous a faster-than-expected market correction in DRAM costs because of oversupply in HBM, which may result in a downturn within the broader DRAM market.

Exane estimates that by the tip of 2025, HBM capability will considerably outpace demand, which may drive down pricing.

“HBM put in capability of ~315k wafer begins per thirty days (wspm) by finish CY24 and ~400k wspm by CY25 will exceed demand of ~168k wspm in CY25,” the financial institution added.

The downgrade can also be rooted in issues concerning the broader reminiscence cycle.

Exane BNP Paribas concluded that the present upcycle for DRAM costs would seemingly peak within the November quarter. Regardless of Micron’s inventory already dropping about 41% from its peak, Exane stays cautious, saying, “There’s nonetheless draw back danger even to our goal value of $67/sh.”

Exane’s bearish stance on Micron contrasts with the broader analyst consensus, with the financial institution noting it stays predominantly bullish with 39 buys and solely 2 holds.

Nonetheless, they imagine additional score downgrades and earnings cuts will weigh on the inventory within the close to time period.