MS Upgrades Micron Technology Stock, Raises PT to $130
Image courtesy of 123rf.com

MS Upgrades Micron Technology Stock, Raises PT to $130

Morgan Stanley upgraded MU to "Equalweight," and raised its price target to $130, citing HBM influence and improving market conditions.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

In a significant move, Morgan Stanley has (NYSE: MS) upgraded its rating for Micron Technology (NASDAQ: MU) stock from “Underweight” to “Equalweight” and substantially increased its price target from $98 to $130, an increase of over 32%.

This upgrade is in sync with the company’s current market dynamics, particularly the influence of high-bandwidth memory (HBM) on buyer sentiment and pricing strength in the memory sector.

Analysts at Morgan Stanley predict that Micron could announce positive financial results this quarter, driven by the ongoing ramp-up phase of HBM supply. Furthermore, the firm expresses growing optimism about the NAND flash memory market, which could potentially drive Micron’s growth in the coming year due to tighter market conditions.

Micron Technology Stock Up 97% Over 1 Year

As of the close on May 17, 2024, Micron Technology’s stock price stood at $125.29, with a market capitalization of $138.74 billion.

The stock has shown impressive returns over various periods, with a year-to-date return of 46.95%, a 1-year return of 97.75%, a 3-year return of 60.06%, and a 5-year return of 241.92%. However, the company currently has a negative profit margin of -20.57% and negative returns on assets (-3.77%) and equity (-8.27%) on a trailing twelve-month basis.

Micron Technology reported revenue of $18.31 billion and a net loss of $3.77 billion over the trailing twelve months. As of the most recent quarter, the company had a total cash of $9.01 billion and a total debt-to-equity ratio of 32.78%. Micron also offers a dividend yield of 0.37%, with an annual dividend of $0.46 per share.

Micron Technology Has Consistently Beaten Expectations in Recent Earnings

Micron Technology is expected to announce its next earnings report on June 26, 2024. Analysts’ consensus EPS forecast for the upcoming quarter stands at $0.34, a significant improvement from the reported EPS of -$1.57 in the same quarter last year.

In the most recent fiscal quarter ending February 2024, Micron reported EPS of $0.27, surpassing the consensus forecast of -$0.42 by a surprising margin of 164.29%. Over the past four quarters, the company has consistently beaten EPS estimates, with surprise margins ranging from 1.75% to 164.29%.

For the fiscal year ending August 2024, analysts expect Micron to report EPS of $0.24. Looking further ahead to the fiscal year ending August 2025, the consensus EPS forecast is $6.39, indicating a strong recovery in the company’s earnings potential.

Do you think MU will continue its rally through the year as AI demand remains robust? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.