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Friday - Baird analysts have increased their price target on Micron Technology (NASDAQ:MU) shares to $163, up from the previous $130, while maintaining an Outperform rating. Currently trading at $103, with analyst targets ranging from $70 to $250, InvestingPro analysis suggests the stock is fairly valued. The revision reflects the analysts’ view that the significant upcoming High Bandwidth (NASDAQ:BAND) Memory (HBM) ramp is not yet factored into the current stock valuation.
The analysts highlighted the growth potential of HBM and Low Power Double Data Rate (LPDDR) memory, both projected to be 60% gross margin product lines. They compared the pace of this ramp to the early days of NAND flash memory, suggesting that Micron is evolving significantly from its historical position in the market. The Total (EPA:TTEF) Addressable Market (TAM) for HBM has been raised for the second time, indicating a positive outlook for the technology’s adoption and market penetration. This aligns with InvestingPro data showing impressive revenue growth of 79.8% over the last twelve months, with analysts expecting continued growth this year.
Micron’s 12H ramp is expected to drive margin expansion, according to the analysts. They anticipate a stabilization in Dynamic Random-Access Memory (DRAM) and NAND pricing in the third calendar quarter of the year, followed by a slight sequential increase in pricing in the fourth calendar quarter.
The analysts concluded their comments by reiterating Micron as a top semiconductor idea, signaling confidence in the company’s strategy and future performance. They believe that the growth and margin expansion from HBM and LPDDR will significantly influence Micron’s financial outcomes. InvestingPro data reveals the company maintains strong financial health with a current ratio of 2.72 and moderate debt levels. For deeper insights into Micron’s valuation and growth prospects, including 8 additional ProTips and comprehensive financial analysis, check out the full Pro Research Report.
In other recent news, Micron Technology reported financial results that exceeded expectations, with key highlights including a robust performance in High Bandwidth Memory (HBM) and DRAM shipments. Analysts from several firms have responded with varied adjustments to their price targets for Micron. Stifel reiterated a Buy rating with a $130 target, emphasizing the company’s strong market positioning and potential for growth despite macroeconomic uncertainties. Rosenblatt Securities also maintained a Buy rating but adjusted the price target to $200, noting the increased demand for HBM as a significant growth driver. Cantor Fitzgerald reaffirmed an Overweight rating with a $130 target, highlighting Micron’s better-than-expected guidance for the upcoming quarter.
Mizuho (NYSE:MFG) Securities raised its price target to $124 from $115, citing Micron’s positive outlook in the HBM market and the anticipated ramp-up of new technologies. Meanwhile, Raymond (NSE:RYMD) James maintained an Outperform rating with a $120 target, recognizing Micron’s revenue performance that surpassed expectations and the potential for gross margin improvements. The analysts’ reports collectively underscore Micron’s strategic importance in the evolving memory market and its potential to capitalize on emerging trends, particularly in artificial intelligence technologies. Despite challenges in the NAND sector, Micron’s focus on HBM and DRAM positions the company favorably for future growth.
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