What Wall Street Thinks Of Micron's Investor Day

The market certainly seemed to like what it heard from Micron Technology, Inc. MU during its investor day event, sending the stock higher by more than 7 percent on Tuesday.

Several Wall Street analysts have weighed in on Micron following the event. Here’s a rundown of what they had to say about the stock.

No Longer A Cyclical Story

KeyBanc analyst Weston Twigg said technology, profits and buybacks were the key themes of the event.

“MU raised its F3Q outlook, announced a $10B buyback, and outlined billions in structural operating profits at its investor event,” Twigg wrote.

Morgan Stanley analyst Joseph Moore said Micron’s focus on maximizing its profitability during product cycles shouldn’t be overlooked.

“The focus is going to be on the better than expected quarter and larger than expected buyback, but we were also impressed by the company's candor in assessing uncompetitive costs of a few years ago, considerable progress in closing the gap thus far, and prospects for closing it further,” Moore wrote.

Baird analyst Tristan Gerra said Micron is making secular improvements to its business, and the semiconductor industry is a secularly growing market.

“Micron's product execution is strengthening, while secular growth markets for memory include data center/AI, mobile, automotive, and IoT,” Gerra wrote.

Good News For Micron And Competitors

Stifel analyst Kevin Cassidy said the $10 billion buyback plan demonstrates management’s confidence in the durability of the company’s business model.

“Management stated that choosing a share buyback as a vehicle to return cash to shareholders as compared to a dividend was not a reflection of the company’s long-term cash flow expectations, but reflected investor feedback and the opportunity to take advantage of the low valuation of the company’s shares,” Cassidy wrote.

Bank of America analyst Simon Woo said Micron’s investor day was good news for both Micron and its competitors.

“Net net, Micron's limited chip supply (DRAM bit growth 20% pa or less: NAND 40% range) and new targets for shareholder returns (capex budget constraints after share buyback) should also suggest upside catalysts for other memory chipmakers (lower competition),” Woo wrote.

Ratings And Targets

• KeyBanc has an Overweight rating and $80 target.
• Morgan Stanley has an Overweight rating and $65 target.
• Baird has an Outperform rating and $100 target.
• Stifel has a Buy rating and $106 target.
• Bank of America has a Buy rating and $85 target.

Micron traded around $59.67 at time of publication.

Related Links:

Wall Street Analysts Remain Bullish On Micron 

Stifel's 5 Takeaways From Micron's Analyst Day