On Friday, Mizuho maintained a Buy rating on Micron Technology (NASDAQ:MU) and increased the price target to $155 from the previous $150.
The firm's analysts support their decision by highlighting the potential for incremental gains in the second half of 2024 due to an anticipated increase in DRAM/NAND content for handsets and PCs, driven by AI on-device. They also note improvements in memory pricing trends and Micron's market share growth in High Bandwidth (NASDAQ:BAND) Memory (HBM).
The firm has left its revenue and earnings per share (EPS) estimates for the May quarter unchanged at $6.64 billion and $0.48, respectively. These figures are in line with the consensus estimates of $6.63 billion in revenue and $0.48 EPS. Looking forward into fiscal year 2024, Mizuho's estimates remain at $24.7 billion in revenue and $0.83 EPS, closely aligning with the consensus of $24.6 billion and $0.86 EPS.
For fiscal year 2025, Mizuho has adjusted its revenue estimates upwards from $35.7 billion to $36.0 billion, with the EPS forecast increasing from $7.96 to $8.04. This is slightly above the consensus, which stands at $35.7 billion in revenue and $8.03 EPS. Additionally, the firm has tweaked its fiscal year 2026 estimates, maintaining revenue at $39.6 billion but raising EPS from $9.48 to $9.63, compared to the consensus of $37.8 billion in revenue and $9.57 EPS.
The new price target of $155 reflects approximately 2.9 times the firm's estimated price-to-book ratio for fiscal year 2025, which is at the upper end of Micron's historical range of about 0.9 to 3 times. Mizuho's stance is that the stock is attractively priced, especially considering the forecasted market dynamics and Micron's strategic position within the industry.
Mizuho's outlook for Micron Technology is based on a combination of product ramp-up expectations, market share gains, and favorable pricing trends. The firm's analysis suggests confidence in the company's growth trajectory and financial performance over the next few years.
InvestingPro Insights
As Mizuho maintains a bullish stance on Micron Technology, InvestingPro data provides additional context to their analysis. With a market capitalization of $139.85 billion, Micron operates as a heavyweight in the semiconductor sector. Despite a challenging past twelve months, with a negative earnings per share (EPS) of $3.43, the company's stock has experienced a significant rally, with a 6-month price total return of 66.29% and a 1-year price total return of 86.26%. This robust performance aligns with the InvestingPro Tips that highlight Micron's strong return over the last year and its position as a prominent player in the industry.
Moreover, Micron's dividend yield currently stands at 0.36%, reflecting the company's commitment to shareholder returns, having raised its dividend for three consecutive years. This is a noteworthy aspect for investors seeking income alongside capital appreciation. Additionally, analysts predict the company will be profitable this year, which could further solidify its financial standing and investment appeal.
For those considering a deeper dive into Micron's financials and market prospects, InvestingPro offers a range of tips and metrics to aid in investment decisions. With the use of the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to an extensive array of insights. In total, there are 15 additional InvestingPro Tips available that provide a comprehensive outlook on Micron's performance and future potential.
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