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Micron's Stock Continues to Rise as Analysts Expect 'Only Positive News'

June 18, 2024
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Micron Technology Inc.'s stock appeared set to extend its gains on Tuesday morning, driven by increasing optimism ahead of the company's earnings report next week.

According to Wedbush analyst Matt Bryson, Micron’s recent guidance likely underestimated the benefits the company would derive from improved pricing. Bryson anticipates that Micron’s average selling prices, revenue, margins, and earnings per share will all “cycle higher” when the company reports its fiscal third-quarter results on June 26.

Bryson expressed confidence in Micron's financial outlook, predicting that the company would continue to deliver positive financial news for the foreseeable future. He expects Micron’s stock to keep rising until there is a shift in industry investment plans. However, he considers such a shift unlikely in the near term, as industry players are focused on profitability following a significant downturn. Consequently, Bryson raised his price target for Micron shares from $130 to $170.

Micron’s stock surged about 5% in morning trading on Tuesday, leading the S&P 500 gainers. Over the past month, the stock has climbed 24%, and it has risen 82% since the beginning of the year.

Stifel analyst Brian Chin also raised his price target for Micron’s stock, moving it from $140 to $165. Chin highlighted that Micron’s stock still represents growth in the artificial intelligence sector at a reasonable price. He is optimistic about the dynamics in high-bandwidth memory (HBM) and Micron’s HBM3E product.

“AI demand for HBM remains the main catalyst, drawing wafer capacity away from DRAM, and now NAND,” Chin wrote, referring to two major types of memory. “We expect consumer DRAM to be constrained, yet resulting in pricing power, allowing Micron to optimize mix and focus on ramping HBM3E.”

Chin is also positive about Micron’s potential to qualify its 12-Hi HBM3E for Nvidia’s B200 platform by the end of the year. He argued that Micron’s stock “warrants a multiple at least on par with the ‘cheapest’ comparables” in Stifel’s index, which is about 16 times the estimates for calendar year 2025.

In a further endorsement, BofA added Micron’s stock to its “US-1” list of compelling picks earlier on Tuesday morning.

In summary, Micron Technology Inc. is experiencing a wave of optimism from analysts who expect the company to benefit significantly from improved pricing and strong AI demand for high-bandwidth memory. With upcoming fiscal third-quarter results expected to reflect these benefits, analysts have raised their price targets and anticipate continued positive performance for the stock.

Cathy Hills
Associate Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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