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Micron Technology, Inc. (MU), headquartered in Boise, Idaho, designs, develops, manufactures, and sells memory and storage products worldwide. Valued at $121.77 billion by market cap, the company delivers high-performance DRAM, NAND, and NOR memory and storage products through its Micron and Crucial brands.
Shares of the memory and storage solutions provider have outperformed the broader market considerably over the past year. MU has gained 51.4% over this time frame, while the S&P 500 Index ($SPX) has risen 21.6%. In 2024, MU stock is up 25.5%, compared to SPX’s 16.7% returns on a YTD basis.
Zooming in further, MU’s gains over the past 52 weeks easily overshadow the S&P 500 Technology Sector SPDR (XLK). The exchange-traded fund has gained 23.2% over the past year, significantly underperforming MU’s gains for the period. The stock’s YTD gains easily outshine the ETF’s 14.4% gains.
On Jul. 17, MU shares closed down more than 6% after Bloomberg reported that the Biden administration had told allies that it would consider using the most severe trade restrictions available if companies continued to give the country access to advanced semiconductor technology. Moreover, Republican presidential nominee Donald Trump’s comments that major chip production hub Taiwan should pay the United States for its defense contributed to the selloff in semiconductor stocks.
On Jun. 27, MU shares closed down more than 7% after the company reported its Q3 results. Its adjusted EPS came in at $0.62, compared to a loss per share of $1.43 in the year-ago quarter, beating the consensus estimates of $0.50. The company’s revenue rose 82% year over year to $6.81 billion, surpassing the Wall Street expectations of $6.70 billion.
MU forecasts fourth-quarter sales to be between $7.4 billion and $7.8 billion, aligning with analyst expectations but below investors’ expectations given the strong growth momentum witnessed during Q3. The company expects challenges, such as tightness in the memory supply chain and the dependence on high-margin products like HBM, to impact its near-term outlook.
For the current fiscal year, ending in August, analysts expect MU to report an EPS growth of 111.7% to $0.58 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 27 analysts covering MU stock, the consensus rating is a “Strong Buy.” That’s based on 24 “Strong Buy” ratings, two “Moderate Buys,” and one “Hold.”
This configuration is slightly more bullish than three months ago, with 23 suggesting a “Strong Buy” and one giving a “Moderate Sell.”
Recently, UBS maintained the “Buy” rating on MU stock and raised its price target from $125 to $155, implying a potential upside of 41.1% from current levels.
The mean price target of $164.26 represents a 49.6% premium to MU’s current price levels. The Street-high price target of $225 suggests an ambitious upside potential of 104.9%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
