Cowen analyst Karl Ackerman downgraded Micron Technology (MU) to Market Perform from Outperform and lowered his price target for the shares to $45 from $46.
The stock in premarket trading is down 2%, or 86c, to $42.46.
The analyst's fieldwork indicates Micron's profitability will decline again in the calendar year 2020. The work shows a "confluence of a sea change in the competitive environment" as well as an erosion in the company's NAND cost leadership, Ackerman tells investors in a research note.
He thinks this is a "stark contrast to what is contemplated by most investors." Channel checks indicate producers have already undercut each other in supplying server DRAM modules and enterprise solid-state drives to data center customers, says the analyst.
He believes Samsung's willingness to outgrow the industry in a "fairly depressed demand environment" should stymie Micron's margin progression for the balance of 2019.
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