Cantor Fitzgerald maintains Micron stock Overweight, $130 target

Published 21/03/2025, 12:32
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On Friday, shares of Micron Technology (NASDAQ:MU), currently trading at $103 and showing a strong 22% year-to-date return, continued to be in focus after Cantor Fitzgerald reiterated its Overweight rating and $130.00 price target. The firm’s analysts noted that the company’s guidance for the May quarter was much better than anticipated, despite previous concerns raised by management at a competitor’s conference five weeks ago. According to InvestingPro data, Micron maintains a "GOOD" overall financial health score, with analysts’ price targets ranging from $70 to $250.

Micron forecasted revenues and earnings per share (EPS) of $8.80 billion and $1.57, respectively, surpassing both the consensus of $8.48 billion and $1.52 EPS, and exceeding buy-side expectations, which had been as low as $1.25-1.30 EPS. This positive outlook aligns with InvestingPro’s analysis, which indicates strong revenue growth of nearly 80% over the last twelve months to $29.1 billion. Gross margin (GM) was also guided to a better than expected 36.5%, which is a 140 basis point decrease quarter over quarter but not as severe as the previously feared 300 basis point drop.

The company attributed its robust performance to broad-based demand in the Data Center sector, particularly for High Bandwidth (NASDAQ:BAND) Memory (HBM), high-capacity server DIMMs, and LPDDR5. Micron achieved revenues exceeding $1 billion in both HBM and combined server plus LP5 segments. In addition, Micron raised its calendar year 2025 total addressable market (TAM) forecast for HBM to over $35 billion, up from the previous $30 billion-plus estimate, and remains confident in reaching its low-20% market share target for HBM within the same timeframe. As one of InvestingPro’s key insights reveals, Micron is a prominent player in the Semiconductors industry, with strong financial metrics including a healthy current ratio of 2.72 and moderate debt levels.

While NAND sector performance remains relatively weak, it was supported by an increase in Consumer-related shipments during the quarter. This led to a rise in shipped bits, albeit with lower than expected average selling prices (ASPs). Micron also noted that enterprise SSD inventory drains continued in the second quarter of fiscal year 2025, but bit growth is expected to resume in the coming months. Consumer NAND inventories are projected to align with the company’s guidance for a bottoming out in Spring 2025. The company’s ability to manage through this cycle is reflected in its strong Piotroski Score of 7, indicating robust financial strength.

Micron anticipates its overall inventories, which increased to $9 billion in the reported quarter, to decrease throughout the year, with DRAM inventories expected to fall below the targeted range of 120 days by the end of the year. The analyst firm’s estimates have been slightly adjusted upward, reflecting improved DRAM and NAND revenues, as well as slightly better gross margins. The reiteration of the Overweight rating and the $130 price target reflects confidence in Micron’s solid performance and the recovery of the NAND market. Based on InvestingPro’s Fair Value analysis, Micron appears to be trading near its fair value, with analysts maintaining a strong buy consensus rating of 1.46 (where 1 is Strong Buy and 5 is Strong Sell).

In other recent news, Micron Technology reported a strong financial performance for its second fiscal quarter, with revenue reaching $8.05 billion and earnings per share (EPS) of $1.56, both surpassing analyst expectations. The company has projected revenue of $8.8 billion for the upcoming quarter, exceeding consensus estimates of $8.6 billion. Analysts from Mizuho (NYSE:MFG) Securities have raised Micron’s stock price target to $124, citing the company’s positive outlook in the high-bandwidth memory (HBM) market. Meanwhile, Raymond (NSE:RYMD) James maintained its Outperform rating with a $120 price target, highlighting significant growth in Micron’s HBM revenue and an upward revision of the HBM Total (EPA:TTEF) Addressable Market (TAM) to over $35 billion.

Citi analysts adjusted their price target for Micron to $120 from $150, maintaining a Buy rating despite the company’s margins falling short of expectations. They anticipate a recovery in the DRAM market starting in the second quarter of 2025. Stifel analysts reiterated a Buy rating with a $130 price target, noting unexpected resilience in NAND bit shipments and projecting signs of recovery in the memory cycle. Micron’s management reported that excess inventory issues with PC and smartphone customers have largely been resolved, with balance sheet inventory levels expected to decrease throughout the year.

The company’s strategic initiatives, including the ramp-up of HBM3E for the GB300 platform and LPDDR5 for NVIDIA (NASDAQ:NVDA) AI servers, are expected to drive growth. Analysts from various firms suggest that Micron’s strong product momentum and strategic positioning in high-value segments like HBM are key factors contributing to its positive outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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