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On Friday, Mizuho (NYSE:MFG) Securities increased its price target on Micron Technology (NASDAQ:MU) shares to $124 from the previous $115, while keeping an Outperform rating on the stock. With a current market capitalization of $115 billion and trading at $103 per share, Micron is currently trading near its InvestingPro calculated Fair Value. Mizuho’s analysis is based on Micron’s recent financial performance and positive outlook, particularly in the high-bandwidth memory (HBM) market.
Micron reported a robust February quarter with revenue and earnings per share (EPS) at $8.05 billion and $1.56, respectively. The company’s trailing twelve-month revenue stands at $29.1 billion, with a healthy gross profit margin of 31%. The company has provided guidance for the May quarter with expected revenues of $8.8 billion, surpassing consensus estimates of $8.6 billion. This guidance is supported by the continued strength in HBM, as noted by Mizuho. InvestingPro data shows strong revenue growth of 80% over the last twelve months.
The analyst highlighted several key points, including the ramp-up of HBM3E 8H and 12H for the GB300 platform, LPDDR5 for NVIDIA (NASDAQ:NVDA) AI servers, and the projection of HBM growth every quarter through calendar year 2025. Micron is estimated to reach approximately $2 billion per quarter in revenue by the November quarter, which would account for around 23% of the $35 billion total addressable market (TAM) for HBM.
Looking ahead to calendar year 2026, Mizuho anticipates significantly higher HBM revenues with the introduction of HBM4 pricing and market share gains. Additionally, the firm observed a strong uptake of QLC NAND eSSDs, which are replacing HDDs in AI servers and enterprise applications. InvestingPro analysts forecast 40% revenue growth for fiscal year 2025, with additional ProTips highlighting the company’s strong financial health score and moderate debt levels. For detailed analysis and more insights, investors can access the comprehensive Pro Research Report available on InvestingPro, covering what really matters about Micron’s financial position and growth prospects.
Mizuho expects a gross margin tailwind in the second half of calendar year 2025, as both HBM-DRAM and NAND markets improve. The firm suggests that Micron may be conservative in its forecasts, given the upcoming GB300 and AI server/NAND ramps. The price target adjustment to $124 is based on approximately 2.0 times the fiscal year 2026 estimated price-to-book value, up from the prior multiple of roughly 1.9 times. Mizuho concludes with a recommendation to buy Micron shares.
In other recent news, Micron Technology reported its Q2 FY2025 earnings, showcasing a robust financial performance that exceeded analyst expectations. The company achieved an earnings per share (EPS) of $1.56, surpassing the forecasted $1.44, with revenue reaching $8.05 billion against the anticipated $7.91 billion. Micron anticipates record revenue in the upcoming quarter, driven by continued demand in data centers and AI-related memory markets. Raymond (NSE:RYMD) James maintained an Outperform rating on Micron, highlighting the company’s revenue performance and significant growth in High Bandwidth (NASDAQ:BAND) Memory (HBM) revenue. Meanwhile, Citi adjusted its outlook, reducing the price target to $120 from $150 but sustaining a Buy rating, citing a rise in DRAM sales and a positive future outlook for DRAM pricing. Stifel also reiterated a Buy rating with a $130 price target, noting resilience in NAND bit shipments and an anticipated uptick in DRAM shipments. The firm emphasized Micron’s strategic positioning in high-value segments like HBM, despite some conservative estimates for future gross margins.
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