Five things to watch in markets in the week ahead
Micron Technology Inc. (NASDAQ:MU) President and CEO Sanjay Mehrotra recently sold a significant portion of his holdings in the company. According to a Form 4 filing with the Securities and Exchange Commission, Mehrotra sold shares totaling $784,985. The transactions occurred on February 14 and 18, 2025, at prices ranging from $100.24 to $107.22 per share. The stock, which has gained 16.48% in the past week and 26.89% year-to-date, is currently trading at $104.36. According to InvestingPro analysis, Micron appears slightly undervalued at current levels.
The sales were made under a pre-established Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined schedule for selling stocks to avoid potential conflicts of interest. Following these transactions, Mehrotra holds 580,009 shares directly and an additional 500,000 shares indirectly through a grantor retained annuity trust (GRAT) for his family’s benefit.
Investors often closely monitor insider transactions like these for insights into the executive’s confidence in the company’s future performance.
In other recent news, Micron Technology announced the completion of a $1 billion senior note offering with a 5.80% interest rate due in 2035. The proceeds are intended to redeem existing 4.975% senior notes due in 2026 and for general corporate purposes. This move is part of Micron’s broader capital management strategy to manage its debt profile and liquidity. At the Wolfe Research conference, Micron’s CFO indicated a decline in fiscal third-quarter gross margins due to a shift towards consumer products and underutilization of NAND production capabilities, despite maintaining second-quarter guidance and forecasting revenue growth for the third quarter. Raymond (NSE:RYMD) James and Citi both adjusted their gross margin estimates for Micron, reflecting the company’s recent guidance that gross margins would decrease by several hundred basis points.
Raymond James reaffirmed an Outperform rating with a $120 price target, citing optimism about High Bandwidth (NASDAQ:BAND) Memory (HBM) as a significant growth opportunity. Meanwhile, Citi maintained a Buy rating with a $150 price target, emphasizing potential recovery in the DRAM market and Micron’s strengths despite current challenges. Both firms adjusted their earnings forecasts for Micron, with Raymond James revising its fiscal year 2025 EPS estimate from $7.07 to $6.54, and Citi lowering its fiscal third-quarter 2025 gross margin estimate from 40.0% to 35.0%. These developments underscore the mixed outlook for Micron as it navigates a challenging market environment.
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