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Rosenblatt Securities maintained a Buy rating on Micron Technology (NASDAQ:MU), with a steady price target of $225.00. The firm's analysis suggests that Micron is expected to report August quarter results that align with predictions, bolstered by a recovery in memory market dynamics.
However, the outlook for sequential performance might be affected by residual inventory issues in non-AI PC and smartphone segments, which could lead to some pressure on average selling prices (ASPs) in the near term.
Rosenblatt has adjusted its fiscal year 2025 estimates to reflect a projected two-quarter delay in the recovery of the non-AI market segments. This adjustment, however, does not alter the firm's perspective on the AI (High Bandwidth (NASDAQ:BAND) Memory and accelerated compute memory cycle) components of Micron's business. The firm anticipates that Micron's management will reassert their 2025 forecast of a supply/demand (S/D) imbalance, which is a key element supporting the Buy rating.
The significance of the S/D imbalance is underscored by what Rosenblatt describes as the largest memory cycle witnessed to date. The firm emphasizes that AI computing capabilities cannot be scaled without corresponding increases in memory, both in capacity (bits) and speed. Against the backdrop of market perceptions that the DRAM cycle is entering a downturn, Rosenblatt views the current sentiment as a buying opportunity for Micron shares.
The reiterated Buy rating and price target of $225 are based on a mid-teens price-to-earnings (P/E) multiple applied to the firm's revised non-GAAP earnings per share (EPS) estimate of $16.50 for fiscal year 2026. This target reflects Rosenblatt's confidence in Micron's long-term prospects, despite near-term market challenges.
Micron Technology has seen a wave of adjustments in its share price targets by multiple financial firms. TD Cowen held a Buy rating but reduced the price target from $160.00 to $115.00, citing stable long-term fundamentals amidst current market uncertainties.
Stifel also maintained a Buy rating, adjusting its price target to $135 from $165, while Citi reduced its price target for Micron to $150, anticipating below-consensus results for Q4 due to DRAM weakness. Despite these adjustments, these firms expect improvements in Micron's revenue and gross margins in the upcoming quarters.
Micron has launched its Crucial P310 2280 Gen4 NVMe solid-state drive (SSD), promising double the performance of Gen3 SSDs and a 40% speed increase over its predecessor. This new SSD targets a wide consumer base, including gamers, students, and creative professionals, offering high-speed boot and application load times at a competitive price.
InvestingPro Insights
As Micron Technology (NASDAQ:MU) navigates market dynamics, real-time metrics from InvestingPro provide a snapshot of the company's financial health and analysts' expectations. With a market capitalization of $100.79 billion, Micron's current P/E ratio stands at a negative -64.78, reflecting the challenges it has faced in profitability over the last twelve months. However, analysts predict a turnaround, expecting the company to be profitable this year, which aligns with Rosenblatt Securities' positive outlook.
InvestingPro Tips highlight that Micron has raised its dividend for three consecutive years, demonstrating a commitment to shareholder returns even amidst market fluctuations. Additionally, the company's liquid assets surpass short-term obligations, indicating a robust liquidity position that can support operations and strategic initiatives. For investors considering Micron's long-term potential, these insights underscore the company's resilience and the analysts' anticipation of sales growth in the current year.
To delve deeper into Micron's performance and for a comprehensive list of additional InvestingPro Tips, visit https://www.investing.com/pro/MU. Investors will find a wealth of information to inform their investment decisions, including an extensive array of analytics and forecasts.
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