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Wolfe Research maintained its Outperform rating on Micron Technology (NASDAQ:MU) and raised the price target on the stock to $200 from $150.
The analysts noted that they were raising estimates on Micron heading into the company’s report (earnings on Wednesday) on stronger industry conditions and optimism regarding high bandwidth memory, or HBM.
While Wolfe expects bullish commentary from the report, near-term conditions are not the reason why it has been bullish on Micron’s stock, the analysts added.
The analysts believe that all memory suppliers are working to constrain supply near-term to avoid having customers build inventory ahead of expected price increases.
Wolfe’s bullish view is rather about CY25/26, and its math can drive a plausible case to $20 EPS – while HBM contributes about $3 to that earnings power, according to the analysts.
The much bigger contributor is the impact on commodity DRAM pricing/margins as HBM demand causes supply to tighten. The plausibility of that scenario is what keeps Wolfe bullish on Micron’s stock despite its recent run, the analysts added.
Year-to-date, Micron’s stock has surged about 63%.
Earlier this month, UBS maintained its Buy rating on Micron and raised the price target and estimates, noting that industry checks suggested that overall DRAM and NAND memory industry pricing continues to be biased higher.
Meanwhile, BofA Securities added the stock to its US 1 List, which represents a collection of the firm’s best investment ideas drawn from Buy-rated, U.S.-listed stocks.
Micron (MU) has a Hold rating at Seeking Alpha’s Quant Rating system, which consistently beats the market. However, the Seeking Alpha authors’ average rating is more positive with a Buy, and so is the average Wall Street analysts’ rating, Strong Buy.