On Thursday, Goldman Sachs (NYSE:GS) adjusted its outlook on Micron Technology (NASDAQ:MU), reducing the stock's price target to $128 from the previous $145, while retaining a Buy rating. The revision follows Micron's guidance for the second fiscal quarter (February) which projected revenues and earnings significantly below the earlier expectations of analysts.
The company, currently valued at $116.5 billion and trading at a P/E ratio of 155, cited that the anticipated robust performance in High-Bandwidth Memory (HBM) and stability in server DRAM would likely be overshadowed by the broader weakness in the conventional DRAM (excluding server DRAM) and NAND markets.
Goldman Sachs acknowledged a misjudgment regarding Micron's stock performance over the past six months and consequently lowered its revenue and non-GAAP EPS (excluding SBC) forecasts for the fiscal years 2025-2027 by 8% and 21%, respectively. Despite these adjustments, the firm maintains its Buy rating, aligning with the broader Wall Street consensus.
According to InvestingPro data, analysts maintain a bullish outlook with a consensus rating of 1.46, while revenue is expected to grow by 52% in the current fiscal year. The analyst expressed confidence in Micron's potential for market share gains in the profitable HBM sector, which is expected to complement what is forecasted to be an improving supply-demand landscape for DRAM and NAND.
This optimism is based on anticipated growth in demand driven by increasing content, as well as disciplined capital expenditure on the supply side. For deeper insights into Micron's valuation and growth metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
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