On Thursday, Goldman Sachs demonstrated confidence in Micron Technology (NASDAQ:MU) by raising its price target to $112 from the previous $103 while reiterating a Buy rating on the stock. The adjustment comes as Micron prepares to announce its second-quarter earnings for the fiscal year on March 20 after the market closes.
The financial firm anticipates that Micron will surpass expectations for the second quarter, bolstered by strong pricing dynamics in both DRAM and NAND segments.
Furthermore, Goldman Sachs predicts that guidance for the third quarter of the fiscal year, ending in May, will surpass current market expectations. This forecast is based on the assumption of continued sequential price increases and improved fixed cost absorption due to rising utilization rates.
Goldman Sachs also points to an upcoming update from Micron's management regarding its short and medium-term goals for High Bandwidth (NASDAQ:BAND) Memory (HBM), which is expected to contribute to earnings per share (EPS) growth and stock performance.
The analyst firm believes that the stock's recent underperformance compared to its peers in the Compute and Networking sectors presents a buying opportunity for investors, especially in light of the potential ramp-up in HBM revenue that could enhance corporate gross margins.
Additionally, Goldman Sachs' estimates for Micron's non-GAAP EPS, excluding stock-based compensation (SBC), for the third and fourth quarters of the fiscal year are $0.44 and $1.04, respectively. These figures are significantly higher than the consensus among other analysts, with the third-quarter estimate being 592% above and the fourth-quarter estimate 38% higher than the Street consensus.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.