Thursday, Raymond James increased its price target on shares of Micron Technology (NASDAQ:MU) to $140.00, up from the previous $125.00, while keeping an Outperform rating on the stock. The adjustment follows Micron's fourth-quarter results and first-quarter forecast, which surpassed the analyst's recent predictions.
The firm's positive outlook for fiscal year 2025 was highlighted, addressing the concerns about the potential downturn in the Memory cycle. High Bandwidth (NASDAQ:BAND) Memory (HBM) demand remains robust, with Micron on course to meet its goals. Management has confirmed that HBM capacity is fully booked through 2025 and anticipates customer inventories for PCs and smartphones to normalize by spring 2025.
Micron's margins are experiencing an upswing due to favorable pricing, a beneficial HBM product mix, and enhanced yields. These factors are expected to generate continued momentum throughout the year. Raymond James expressed little worry regarding the recent capital expenditure spikes in the industry, noting that these investments are mainly directed towards HBM and clean room expansion.
The analyst anticipates the current DRAM upcycle to persist until 2025, with Micron potentially achieving an earnings per share (EPS) of around $12 at the cycle's peak, with more than $2 of that figure attributable to HBM. The firm believes that the sustained growth driven by HBM warrants a higher peak valuation multiple, prompting the price target increase from $125 to $140 while reiterating the Outperform rating.
In other recent news, Micron Technology has been the focus of several analyst firms following its strong earnings and revenue results. Rosenblatt Securities raised its price target on Micron to $250, reflecting the company's impressive financial performance and potential. Similarly, TD Cowen boosted its price target to $135, citing upcoming milestones such as the qualification of Micron's B100 series and improved supply chain visibility.
On the other hand, Mizuho lowered its price target to $135 despite Micron's robust August quarter and positive outlook for the November quarter. The firm highlighted Micron's anticipated growth in the High Bandwidth Memory (HBM) market, expected to reach "multiple $Bs" by 2025.
Goldman Sachs (NYSE:GS) maintained its Buy rating on Micron with a $145 price target, highlighting Micron's market share gains in high-value segments. UBS also kept a steady Buy rating with a $135 price target, emphasizing the temporary nature of current fluctuations in PC and smartphone inventory levels.
InvestingPro Insights
Based on the latest data from InvestingPro, Micron Technology (NASDAQ:MU) is currently trading at a high earnings multiple with a P/E ratio of -68.02, which reflects market expectations of future growth. Despite the negative P/E ratio, analysts have a positive outlook, anticipating sales growth in the current year. This aligns with Raymond James' optimistic view on Micron's fiscal year 2025, particularly noting the strong demand for High Bandwidth Memory (HBM).
InvestingPro Tips suggest that Micron has raised its dividend for three consecutive years, indicating a commitment to returning value to shareholders. Moreover, the company's liquid assets exceed its short-term obligations, demonstrating a strong liquidity position. These factors, combined with the fact that Micron is a prominent player in the Semiconductors & Semiconductor Equipment industry, might provide investors with more confidence in the company's stability and growth prospects.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/MU, which could offer further insights into Micron's financial health and market position.
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