On Thursday, Piper Sandler adjusted its price target for Micron Technology (NASDAQ:MU) shares, raising it to $150 from the previous $130, while maintaining an Overweight rating on the stock. The firm's stance comes after a review of Micron's recent May earnings report, which indicated a positive trajectory for the company's end markets.
The analyst from Piper Sandler noted that demand for Micron's products is on the rise, with supply remaining relatively tight. This situation is expected to persist through most of 2025. Micron's earnings call highlighted a significant rebound in data center memory demand, with revenues nearly doubling year-over-year. The company has seen strong demand for High Bandwidth (NASDAQ:BAND) Memory (HBM), which is already sold out for the fiscal year 2024 and almost fully booked for most of the fiscal year 2025.
With the ongoing supply shortages, Micron has also been able to increase pricing. In response to the favorable market conditions, Micron is planning to increase its capital expenditures in the coming year. Approximately half of this investment will be directed towards expanding production capacity through the construction of new fabrication plants, which are anticipated to support further growth in its front-end wafer supply.
The analyst concluded that the current business conditions for Micron are "extremely favorable," leading to the reiterated Overweight rating and the new price target of $150. This reflects confidence in the company's performance and market position, as it continues to navigate the dynamics of supply and demand within the semiconductor industry.
In other recent news, Micron Technology has experienced several notable developments. The company's fourth-quarter revenue projection of $7.6 billion, driven primarily by the sale of its high-bandwidth memory chips, matched average analyst predictions. UBS adjusted its price target on Micron shares to $153 from the previous $155, while maintaining a Buy rating. Barclays and Stifel held their Overweight and Buy ratings respectively, with price targets of $145 and $165.
Micron Technology also announced a raised capital expenditure forecast for fiscal year 2024 to $8 billion, including the construction of new facilities in Idaho and New York. The company anticipates receiving $6.1 billion in grants from the U.S. CHIPS Act.
Micron's third-quarter revenue surpassed estimates, reporting a revenue of $6.81 billion. The company's earnings per share exceeded the high end, indicating a conservative forecast. Despite a recent dip in Micron shares, analysts from Goldman Sachs view this as an opportunity to increase investments in the company.
UBS revised its earnings per share estimates for Micron for calendar years 2025 and 2026, reducing them by approximately 10% and 14%, respectively. However, the firm maintains its Buy rating, citing Micron as a top player in the artificial intelligence market.
InvestingPro Insights
In light of Piper Sandler's recent price target adjustment for Micron Technology, real-time data and insights from InvestingPro can provide additional context to investors. Micron's market capitalization stands at a robust $157.64 billion, underscoring its significant presence in the semiconductor industry. Despite experiencing a challenging year with a revenue decline of -20.6% over the last twelve months as of Q2 2024, analysts are optimistic about Micron's future. This is supported by an impressive 114.4% return on the stock over the past year and a notable 66.98% year-to-date price total return.
InvestingPro Tips reveal that Micron has consistently raised its dividend for the past three years and is expected to see sales growth in the current year. Additionally, analysts have revised their earnings upwards for the upcoming period, indicating a positive outlook. Micron is also recognized as a prominent player in the Semiconductors & Semiconductor Equipment industry, a factor that could be contributing to the confidence reflected in Piper Sandler's analysis.
For investors seeking a more in-depth analysis, there are 15 additional InvestingPro Tips available for Micron Technology at https://www.investing.com/pro/MU. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to exclusive insights that could further inform investment decisions.
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