The shares of Micron Technology Inc. they received price hikes from more than half of analysts following it on Friday and threw the sell rating held back by strong growth expected in 2021.
Thursday afternoon, Micron MU,
confirmed that the memory chip market is flipping through the earnings report and a outlook that exceeded Wall Street estimates, adding that the outlook would have been stronger had it not been for the shortage of chips not of memory that would hinder production in the computer industry.
Micron released its latest “sell-out” rating of withdrawal as Morningstar analyst Abhinav Davuluri raised its rating to three-star shares, or a two-star retention rating, and raised its target price at $ 65 from $ 50.
“We believe Micron is well positioned to enjoy double-digit revenue growth during fiscal 2021, thanks to increased memory content associated with AI, cloud, 5G and new gaming consoles,” Davuluri said. .
Of the 35 analysts covering Micron, 29 have buy or overweight ratings on the stock and six have hold ratings. Of those 22 analysts raised their stock price targets, resulting in an average price target of $ 97.23, compared to $ 85.50 prior to the report, according to FactSet data.
Evercore ISI analyst CJ Muse, which is rated higher than its target prices and has raised its target price to $ 105, said Micron is definitely at the end of the cycle and can only go up from here .
“Let’s be simple: DRAM has hit rock bottom,” Muse said. “And the outlook is bright, backed by two years of low supply spending along with growth engines led by 5G, AI, Cloud and an automotive / industrial recovery that should withstand supply constraints as we move into 2021 and potentially beyond. “
Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used in computers and servers that accounted for 70% of Micron’s revenue of $ 5.777 billion during the first fiscal quarter. NAND chips are flash memory chips that are used in USB drives and smaller devices, such as digital cameras.
Citi Research analyst Christopher Danley, who has a buy rating and raised his price target to $ 113 from $ 110, said DRAM recovery “should last at least a year.”
“After a false start in 2020, we expect DRAM prices to continue their upward trajectory from 1Q21, given the larger imbalance between supply and demand since 2017,” Danley said. Last year, Micron had also secured a fund in the memory chips market that had suffered a one-year oversupply.
“We anticipate that DRAM supply will grow + 16.8% year-on-year in 2021, below DRAM demand growth of + 20.1% year-on-year,” Danley said.
Cowen analyst Karl Ackerman, who has outperformed the rating and raised his price target from $ 90 to $ 90, examined past results that were driven by a change in accounting and the lack of repurchase of shares during the quarter.
“A favorable accounting change in a rising price environment and the absence of rewards can be points of attachment for bears,” Ackerman said. “However, MU is entering F21 with possibly the best product portfolio in the industry that should allow it to capitalize on expanding demand.”
Micron shares fluctuated between slight gains and losses in Friday’s trading. Again, stocks are up more than 5% a week as analysts improved their ratings before gains. Shares closed Thursday at $ 79.11, their highest completion since Aug. 31, 2000, when they closed at $ 81.75.
Over the past three months, Micron shares have risen 60%, compared to a 25% increase in the PHLX Semiconductor SOX Index,
an 11% rise in the S&P 500 SPX index,
and a 15% gain from the Nasdaq Composite Index COMP,
Compare that to the last twelve months, where Micron gained 39% and the SOX index rose 58%.