Fed’s Powell opens door to potential rate cuts at Jackson Hole
Investing.com - Micron Technology (NASDAQ:MU) maintained its Neutral rating and $140 price target at BofA Securities despite the chipmaker raising its fiscal fourth-quarter outlook. The semiconductor giant, currently trading near its 52-week high of $129.85, has demonstrated strong momentum with a 47% gain year-to-date. According to InvestingPro data, 22 analysts have recently revised their earnings estimates upward for the upcoming period.
BofA analyst Vivek Arya cited Micron’s improved outlook was driven by "broad-based ASP strength in both DRAM and NAND" memory chips. The company’s management noted shipment outlook remains unchanged from late June despite potential pull-in activities in consumer markets. This positive outlook aligns with Micron’s robust financial health, earning a "GOOD" overall score from InvestingPro’s comprehensive analysis, which evaluates multiple factors including growth, profitability, and momentum.
Micron reported strong demand across all end markets with stronger pricing in both DDR5 and LP5 memory. The company also highlighted that HBM3e 12-high volumes have surpassed previous 8-high volumes, and management expressed confidence in selling out calendar year 2026 HBM supplies.
BofA acknowledged multiple near-term tailwinds helping lift estimates and returning operating margins to the 30% long-term cross-cycle guidance. The company’s current gross profit margin stands at 37.13%, with a healthy current ratio of 2.75x and moderate debt levels. However, the firm maintained its Neutral stance due to limited visibility into calendar years 2026-2027 unit and pricing outside data center and AI markets. For deeper insights into Micron’s valuation and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with comprehensive analysis and actionable intelligence.
The price target reflects a modestly lower 2.2x calendar year 2026 estimated price-to-book ratio versus 2.3x previously, which BofA attributed to "increased tariff and geopolitical concerns." The firm noted Micron currently trades at a 0.7x premium over competitor SK Hynix, above the historical average of approximately 0.4x.
In other recent news, Micron Technology has raised its fiscal fourth-quarter guidance, citing improved pricing, particularly in DRAM products. The company now anticipates revenue of $11.2 billion, up from an earlier forecast of $10.7 billion, surpassing the consensus estimate of $10.8 billion. Micron has also increased its earnings per share guidance to $2.85, exceeding analyst expectations of $2.52. Several analyst firms have responded positively to these developments. Barclays (LON:BARC) reiterated its Overweight rating with a $140 price target, while Mizuho (NYSE:MFG) raised its price target to $155 and maintained an Outperform rating. Rosenblatt Securities upheld its Buy rating with a $200 price target, noting the stronger-than-expected pre-announced results. Wolfe Research also reiterated its Outperform rating with a $160 price target, highlighting improvements in gross margins and revenue. Meanwhile, Stifel reaffirmed its Buy rating and set a $145 price target, emphasizing the strength in DDR4 PC memory and LPDDR4 mobile DRAM pricing.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.