Micron Technology Inc. ‘s share prices achieved price increases of more than half of the analysts who followed them on Friday and lowered the sales rating of the expected strong growth in 2021.
Late Thursday, Micron MU,
confirms that the memory chip market is turning around the reporting of results and a outlook that has topped the Wall Street top, adding that the outlook would have been stronger than the shortage of non-memory chips the hinder production in the computer industry.
Micron lowered its final sell rating when Morningstar analyst Abhinav Davuluri raised its rating on the stock to three stars, or a two-star hold, and raised its price target to $ 65 from $ 50.
“We believe Micron is well positioned to enjoy double-digit revenue growth in fiscal 2021, thanks to increased memory content related to AI, cloud, 5G and new game consoles,” Davuluri said.
Of the 35 analysts covering Micron, 29 have a rate or overweight rating on the stock, and six have a rating. Of the 22 analysts, their price targets increased on the stock, which according to FactSet data has an average price target of $ 97.23 compared to $ 85.50 before the report.
Evercore ISI analyst CJ Muse, who achieved a better performance rating and raised his price target from $ 90 to $ 105, indicated that Micron is definitely at the end of its cycle and can only rise from here.
“Let’s keep it simple – DRAM has a bottom line,” Muse said. “And the outlook is well supported by two years of undersupply in supply, coupled with growth operators led by 5G, AI, Cloud, and a recovery in the automotive / industry that should support supply constraints as we continue to 2021 and possibly thereafter.”
Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used on computers and servers, accounting for 70% of Micron’s revenue of $ 5.77 billion in the first quarter. NAND chips are the flash memory chips used in USB drives and smaller devices, such as digital cameras.
Citi Research analyst Christopher Danley, who has a sales figure and raised his price target to $ 113 from $ 110, said the recovery in DRAM “should take at least a year”.
“After a false start in 2020, we expect DRAM prices to continue its upward trajectory from 1K21, given the largest imbalance in supply / demand since 2017,” Danley said. Last year, Micron also mentioned a bottom in the market for memory chips that had a year-long supply.
“We predict that DRAM supply will grow by + 16.8% YoY in 2021, below DRAM demand growth of + 20.1% YoY,” Danley said.
Cowen analyst Karl Ackerman, with a better performance rating and raising its price target from $ 80 to $ 90, looked past the results reinforced by an accounting change and a lack of share buybacks during the quarter.
“A favorable accounting change in a rising price environment and an absence of repurchase may be the best points for bears,” Ackerman said. “However, MU is entering F21 with probably the best product portfolio in the industry that will enable it to capitalize on the greater demand.”
Micron shares ranged from slight gains to losses in Friday trading. Then the stock is up more than 5% higher again in the week as analysts improved their ratings on the stock ahead of earnings. Shares closed at $ 79.11 on Thursday, their highest high since August 31, 2000, when they closed at $ 81.75.
Over the past three months, Micron shares have risen 60%, compared to a 25% increase on the PHLX Semiconductor Index SOX,
an increase of 11% through the S&P 500 index SPX,
and a gain of 15% through the Nasdaq Composite Index COMP,
Compare this with the past twelve months, where Micron rose 39% and the SOX index rose 58%.