Stifel maintains Buy rating and $130 target on Micron Technology stock

Tuesday, Micron Technology (NASDAQ:MU) shares maintained their Buy rating and $130.00 price target from Stifel analysts. With the stock trading at $103.11 and showing impressive YTD returns of 22.5%, InvestingPro data reveals Micron is currently trading at Fair Value. In anticipation of the company’s earnings report scheduled for Thursday after the market closes, Stifel’s commentary highlighted expectations for Micron to meet the current quarter’s consensus estimates. However, the firm adjusted its projections downward for the following quarter, reflecting ongoing softness in memory pricing and a shift in product mix.

Stifel noted that Micron’s management has already indicated a likely decline in gross margins for the third fiscal quarter ending in May. Despite this, the firm’s subsequent reports suggest a more optimistic outlook, particularly regarding the potential for improving NAND pricing in the second calendar quarter. Additionally, Stifel reported hearing positive indicators concerning memory demand from China.

Looking ahead, the fourth fiscal quarter ending in August is seen as a more promising period for Micron, with expectations of a seasonal and cyclical recovery in bit demand. Stifel also anticipates that Micron will benefit from favorable pricing and the successful execution of its high gross margin, High Bandwidth (NASDAQ:BAND) Memory (HBM) ramp. The firm is expecting updates on these fronts to be positive.

The analyst’s statement concluded with a focus on the future, indicating a belief in Micron’s potential for re-acceleration in key profit and loss metrics by the fourth fiscal quarter, based on a variety of factors including pricing dynamics, demand cycles, and product execution.

In other recent news, Micron Technology is set to report its earnings for the second fiscal quarter, with expectations aligning with consensus estimates. Analysts from Stifel have maintained a Buy rating with a $130 price target, noting a positive outlook for the fourth fiscal quarter due to improving NAND pricing and increased demand from China. Similarly, TD Cowen reiterated a Buy rating with a $125 price target, maintaining their earnings per share estimate for the May quarter at $1.35, despite a cautious stance regarding long-term trends. Citi analysts also reiterated a Buy rating, setting a price target of $150, while expressing optimism about DRAM pricing improvements and Micron’s opportunities in AI High Bandwidth Memory.

Additionally, Micron is expected to follow KIOXIA in adopting the emerging NAND wafer-to-wafer hybrid bonding technology, which could enhance performance and reduce costs. This development is part of a broader trend in the NAND market, with companies like Samsung (KS:005930) and SK Hynix also anticipated to adopt this technology. In related industry news, Nvidia (NASDAQ:NVDA) led premarket gains among major tech stocks, following Broadcom (NASDAQ:AVGO)’s upbeat forecast for AI chip production. Broadcom reported first-quarter earnings that surpassed analyst estimates, further boosting investor confidence in the sector.

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