On Tuesday, CFRA, a notable financial research firm, upgraded its price target on shares of Micron Technology (NASDAQ:MU) to $110, up from the previous target of $94. The firm maintained its Buy rating on the stock. The revised target is based on a price-to-earnings (P/E) ratio of 12.6 times CFRA's calendar year 2025 earnings per share (EPS) projection, aligning with Micron's long-term historical average.
CFRA has also adjusted its fiscal year 2024 (ending August) loss per share estimate for Micron to $0.20 from $0.51, and increased its fiscal year 2025 EPS forecast to $7.28 from $6.14. As the company prepares to announce its February-quarter results on March 20, CFRA anticipates a loss per share of $0.25 on revenues of $5.3 billion, which would represent a 45% increase. The firm suggests that the memory market's recovery is picking up pace.
Micron, according to CFRA, is well-positioned to benefit from the current market dynamics, especially due to its strong Dynamic Random-Access Memory (DRAM) exposure, which accounts for over 70% of its revenue. The analyst noted a more favorable pricing environment for DRAM. Additionally, Micron's focus on higher-margin DRAM servers and the potential growth from High Bandwidth (NASDAQ:BAND) Memory (HBM), particularly with its association with Nvidia (NASDAQ:NVDA)'s H200 and the upcoming B200, is seen as a positive.
CFRA's analysis also points to the potential for Micron's multiple to expand beyond historical levels. This is not factored into their current analysis but is mentioned as a possible source of further upside. The firm's outlook is buoyed by the expected content gains and the trend toward higher-value artificial intelligence servers.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.