Chipmaker Micron’s Earnings to More Than Double in Q2; Target Price $115

Micron Technology, one of the world’s leading semiconductor manufacturers, is expected to report its fiscal second-quarter earnings of $0.93 per share on Wednesday, representing year-over-year growth of more than 106% from $0.45 per share seen in the same quarter a year ago.

The semiconductor company is expected to post revenue growth of about 30% year-on-year to around $6.2 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 10%.

Micron shares, which surged about 40% in 2020, traded 1.4% lower at $86.77 on Monday. But the stock rose over 15% so far this year.

Analyst Comments

“We expect this to be a good quarter, though enthusiasm over sharp increases in pc and server pricing should be tempered by smaller increases elsewhere, and potential supply constraints in the May quarter; still, we would expect our EPS to increase. Remain Overweight with $105 price target,” noted Joseph Moore, equity analyst at Morgan Stanley.

“We expect DRAM pricing to inflect in 2021 as inventories normalize and demand returns. We alter our price assumptions and now expect stronger pricing for both NAND and DRAM in the May quarter. We see demand growth on the back of seasonality, memory elasticity/higher content per unit, and low customer inventories, and very slow supply growth in DRAM given declines in capex. We continue to believe that memory stocks have a relatively well-defined earnings cycle, though highs and lows are likely to be better than they have been historically.”

Micron Stock Price Forecast

Twenty-six analysts who offered stock ratings for Micron in the last three months forecast the average price in 12 months of $115.59 with a high forecast of $150.00 and a low forecast of $90.00.

The average price target represents a 33.35% increase from the last price of $86.68. Of those 26 analysts, 23 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $105 with a high of $140 under a bull scenario and $40 under the worst-case scenario. The firm gave an “Overweight” rating on the semiconductor makers’ stock.

Several other analysts have also updated their stock outlook. Susquehanna raised the stock price forecast to $145 from $135. BMO upped the target price to $90 from $80. Citigroup lifted the price target to $130 from $116. UBS raised the price objective to $120 from $110. Needham upped the target price to $115 from $100.

Moreover, Rosenblatt Securities increased the target price to $150 from $120. JP Morgan lifted the price target to $130 from $100. Piper Sandler upped the stock price forecast to $90 from $80.

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