On Monday, Citi reaffirmed its Buy rating and $150.00 price target for Micron Technology (NASDAQ:MU) stock, now valued at over $113 billion in market capitalization, in anticipation of the company's first-quarter fiscal year 2025 results, which are scheduled to be released on December 18, after the market closes.
According to InvestingPro data, Micron's stock has shown strong momentum with a 26% return over the past year, despite currently trading below its Fair Value.
The analyst at Citi predicts that Micron's upcoming report will likely reveal figures and forecasts that are somewhat below the consensus. This expectation is attributed to weaker performance in legacy DRAM, which accounted for 30% of the company's fiscal year 2024 sales.
According to the analyst, current excess inventory levels in the DRAM market, particularly within the PC and handset sectors that together represent half of Micron's fiscal year 2024 sales, are expected to normalize by this spring.
Despite this short-term challenge, the strength in demand from the data center segment, which made up 35% of the company's sales in fiscal year 2024, is seen as a compensating factor.
InvestingPro analysis reveals impressive revenue growth of 61.6% in the last twelve months, with analysts expecting continued sales growth this year. Get access to 12 more exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
The Citi analyst's outlook for Micron remains positive, emphasizing a potential recovery in the DRAM market based on supply and demand dynamics projected for calendar year 2025. The firm's confidence in the sector's recovery and Micron's position within the market underpin their reiterated Buy rating and unwavering price target of $150. As a prominent player in the Semiconductors industry, Micron maintains a healthy financial position with a current ratio of 2.64 and moderate debt levels.
Micron Technology, a leader in memory and storage solutions, is closely monitored by investors for signs of industry trends, particularly in DRAM, which is a critical component in various technology applications.
The company's upcoming earnings report and guidance will provide valuable insights into the current state of the memory market and Micron's operational performance.
In other recent news, Micron Technology's earnings report, scheduled for December 18, is in focus with TD Cowen maintaining a Buy rating on the company's stock.
Analysts from Stifel and Wells Fargo (NYSE:WFC) have also echoed a positive outlook for Micron, citing strong growth potential in the High Bandwidth (NASDAQ:BAND) Memory (HBM) market and robust margins despite a mid-cycle correction.
This comes alongside Micron securing a substantial subsidy of over $6.1 billion from the U.S. Department of Commerce to support domestic semiconductor manufacturing, with plans to construct facilities in New York and Idaho.
In addition to Micron's developments, the semiconductor sector has seen a boost from Broadcom (NASDAQ:AVGO)'s positive financial results, showing a 220% annual increase in AI revenue, which has lifted investor sentiment across the sector.
As for Micron, the company's advancements in HBM are anticipated to drive significant revenue growth, with analysts forecasting a 52% increase in FY2025. These recent developments highlight the ongoing momentum and growth potential in the semiconductor industry.
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