The stock of Micron Technology Inc. received price increases from more than half of its analysts that followed it on Friday and shed its sales rating in the expectation of strong growth in 2021.
Late Thursday, Micron Mu,
It confirmed that the memory-chip market is changing around reporting results and an approach that topped Wall Street’s projections, stating that if the non-memory chip shortage in computers is not constrained to production it will The outlook will be strong.
Micron sheds its final holdout “sell” rating as Morningstar analyst Abhinav Davuluri, raised his rating on the stock to a hold rating by three stars or two stars, and raised his price target to $ 65 from $ 50 .
“We believe that Micron is well positioned 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 covering Micron, 29 have bought or more than six ratings on the stock. According to FactSet’s data, 22 analysts raised their price target on the stock to $ 85.50 before the report, which had an average price of $ 97.23.
Evercore ISI analyst CJ Saraswati, who has a better rating and has raised his price target from $ 90 to $ 105, indicated that Micron is definitely at the bottom of its cycle and can only go up from here .
“Let’s keep it simple – DRAM is fried,” the museum said. “And Outlook has been supported with 2 years of understanding on suppliers supplying with 5G, AI, cloud, and automotive / industrial recovery drivers. We should support supply bottlenecks as we go to 2021 Go on and on. “
Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory most commonly used in PCs and servers and accounts for 70% of Micron’s $ 5.77 billion in the fiscal first quarter. NAND chips are USB memory and flash memory chips used in small devices, such as digital cameras.
City Research analyst Christopher Danley, who has a rating and moved his price target from $ 110 to $ 113, said the recovery in DRAM “should last at least a year.”
“After a false start in 2020, we expect DRAM pricing to see its biggest supply / demand imbalance since 2017 to maintain its upward trajectory in 1Q21,” Danley said. Last year, Micron also called a bottom in the memory-chip market that suffered from a year-long supply gap.
“We forecast DRAM supply to grow in 2021, which is 20.1% below YYY’s growth demand,” Danley said.
Cowren analyst Karl Ackerman, who has an outperform rating and raised his price target from $ 80 to $ 90, sees past results that were exacerbated by an accounting change and a lack of stock repurchases in the quarter.
“A favorable accounting change and the absence of buybacks in a rising price environment may stick the points for the bears,” Ackerman said. “However, MU enters the F21 with the best product portfolio in the industry which should enable it to capitalize on the wider demand.”
Micron shares rose sharply in Friday trading amid modest gains and losses. Again, the stock is up more than 5% in the week as analysts upgraded their rating on the stock before earnings. The shares closed at $ 79.11 on Thursday, their highest end since August 31, 2000, when they closed at $ 81.75.
In the past three months, Micron shares have fallen by 60%, with a 25% increase on PHLX Semiconductor SOL,
11% increase by S&P 500 Index SPX,
And a 15% gain by the Nasdaq Composite Index comp
Compare that with the previous 12 months where Micron gained 39% and the SOX index rose 58%.