The shares of Micron Technology Inc. raised the price of more than half of analysts following it on Friday, and downgraded its sales rating amid strong growth in 2021.
Late Thursday, Micron MU,
confirmed that the memory chip market is turning to reporting results and prospects that are at the top of Wall Street estimates, adding that the prospects would be stronger if not for the lack of memory chips hampering production in the computer industry.
Micron dropped its final “sell”
“We believe that Micron is in a good position to enjoy double-digit revenue growth in fiscal 2021, thanks to increased memory content associated with AI, cloud, 5G and new game consoles,” Davuluri said.
Of the 35 analysts that cover Micron, 29 have ratings to buy or overweight stocks, and six have ratings to hold. Of those 22 analysts, they raised their stock price targets to an average price of $ 97.23, compared to $ 85.50 before the report, according to FactSet.
Evercore ISI CJ Muse analyst, which has a higher rating and raised its price target to $ 105 from $ 90, said that Micron is definitely at the bottom of its cycle and can only get on here.
“Let’s simplify it – DRAM has bottomed out,” Musa said. “And the outlook is bright, backed by 2 years of under-delivery, combined with growth drivers driven by 5G, AI, Cloud and automotive / industrial recovery, which must support supply constraints as we move forward in 2021. and potentially thereafter. “
Micron specializes in DRAM and NAND memory chips. DRAM, or random access dynamic memory, is the type of memory commonly used in personal computers and servers and accounts for 70% of Micron’s $ 5.77 billion revenue in the first quarter. NAND chips are flash memory chips used in USB devices and smaller devices such as digital cameras.
Citi Research analyst Christopher Danley, who has a buying rating and raised his price target to $ 113 from $ 110, said the recovery in DRAM “should last at least a year.”
“After a false start in 2020, we expect DRAM pricing to maintain its upward trajectory, starting in 1Q21, given the biggest imbalance between supply and demand since 2017,” Danley said. Last year, Micron also announced a bottom in the memory chip market, suffering from year-round oversaturation.
“We forecast that DRAM supply will grow by + 16.8% on an annual basis in 2021, below the growth of DRAM demand of + 20.1% on an annual basis,” said Danley.
Cowen analyst Carl Ackerman, who has a better rating and raised his price target to $ 90 from $ 80, looked at past results, supported by an accounting change and a lack of share buybacks during the quarter.
“Favorable accounting changes in the rising price environment and lack of redemption may be an obstacle for bears,” Ackerman said. “However, MU enters F21 with perhaps the best product portfolio in the industry, which should allow it to take advantage of expanding demand.”
Shares of Micron balanced between slight gains and losses in trading on Friday. On the other hand, stocks rose more than 5% during the week as analysts improved their stock rating before earnings. Shares closed at $ 79.11 on Thursday, their highest end since August 31, 2000, when they closed at $ 81.75.
Micron shares have risen 60% in the last three months, compared to a 25% increase in the PHLX Semiconductor Index SOX,
11% growth of the S&P 500 SPX index,
and a 15% profit from the Nasdaq Composite Index COMP,
Compare that to the last 12 months, when Micron won 39% and the SOX index rose 58%.