Micron Technology Guidance Reflects Strong Pricing Rebound: 10 Analysts Deep Dive Into Q1 Earnings

Micron Technology Inc MU shares climbed in early trading on Thursday, after the company reported better-than-expected revenues for its fiscal first quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

Goldman Sachs On Micron Technology

Analyst Toshiya Hari maintained a Buy rating while raising the price target from $85 to $97.

This was the first time in seven quarters that Micron Technology announced its gross margin and earnings outlook ahead of Street expectations, Hari said in a note.

“Supported by an improving DRAM and NAND ASP outlook, Micron guided FY2Q (Feb) non-GAAP gross margin (excl. SBC) to 13.0% at the mid-point, ~840bps above FactSet consensus of 4.6%, and non-GAAP EPS (excl. SBC) to -$028 at the mid-point vs. prior expectations of -$028,” Hari wrote.

Evercore ISI On Micron Technology

Analyst Matthew Prisco reiterated an Outperform rating while lifting the price target from $90 to $100.

Micron reported a solid beat and raise quarter, “with guidance of subdued bit shipments in the out-quarters being more than offset by better pricing trends,” Prisco said.

“Inventory levels are at or near normal levels across the PC, Mobile, Auto, and Industrial end-markets, with Data Center expected to approach normal levels in 1HCY24 and mgmt. highlighting a strong underlying demand profile based on proliferation of AI functionality and associated content increases,” he added.

KeyBanc Capital Markets On Micron Technology

Analyst John Vinh reaffirmed an Overweight rating while raising the price target from $90 to $100.

Micron Technology’s outlook “reflects strong rebound in pricing,” with guidance implying “NAND pricing is +25-30% q/q and DRAM pricing is increasing ~15% q/q,” Vinh said.

“Additionally, pricing is expected to improve through FY24, as industry supply is expected to be below bit demand for NAND/DRAM,” he added.

Mizuho Securities On Micron Technology

Analyst Vijay Rakesh maintained a Buy rating while raising the price target from $86 to $95.

DRAM and NAND pricing tailwinds are likely to continue through 2024 and 2025, Rakesh said. The capex projection for fiscal 2024 is up only around 1%, which is well below “concerns of an aggressive ramp,” he added.

Another positive is “HBM3E Key driving design wins, margins and with 10% better performance and 30% improve power consumption versus peers,” the analyst further stated.

Rosenblatt Securities On Micron Technology

Analyst Hans Mosesmann reiterated a Buy rating while lifting the price target from $100 to $140.

“Micron definitively has signaled the start of a massive AI driven memory up-cycle with leading edge nodes and HBM already constrained or sold out for 2024,” Mosesmann wrote in a note.

“Industry bit supply of DRAM (and even NAND), will undershoot demand materially next year on disciplined industry supply management, DDR5/HBM memory ramps, and much stronger AI platform ramps in AI that sport 4-8x content vs. standard configurations,” he added.

Check out other analyst stock ratings.

Stifel On Micron Technology

Analyst Brian Chin reaffirmed a Hold rating while raising the price target from $76 to $80.

“Micron reported F1Q(Nov) earnings that were modestly ahead of the company’s prior pre-announcement,” Chin said.

“Micron remains positive on GM/pricing trajectory beyond F2Q, and we now model EPS approaching breakeven in F3Q(May),” he added.

Needham On Micron Technology

Analyst Quinn Bolton maintained a Buy rating while raising the price target from $85 to $100.

Pricing is likely to continue moving higher throughout 2024 and “cost-downs will also be better-than-expected,” Bolton said. “Leading-edge nodes (DRAM and NAND) are oversubscribed in CY24, with a ~14 month build time for new capacity as a buffer,” he added.

Micron Technology will ship its HBM3E to NVIDIA Corp NVDA for its H200 and GH200 offerings early next year, the analyst stated.

Wedbush On Micron Technology

Analyst Matt Bryson reiterated an Outperform rating and price target of $95.

“MU's FQ2 guide demonstrates the rapid rate of financial model improvement memory industry participants realize during periods of industry recovery (comparable to the rapid rate of financial decline during sharp industry downturns that Micron and its peers displayed through 2023),” Bryson wrote in a note.

“In the near-term, self-imposed production limitations across the industry should yield continued favorable supply/demand fundamentals allowing for further ASP increases,” he added.

BMO Capital Markets On Micron Technology

Analyst Ambrish Srivastava reaffirmed an Outperform rating and price target of $90.

“Results, guidance and commentary, are indicative of a memory cycle firmly in the upswing,” Srivastava wrote.

“Demand trends, particularly in AI, and Micron's participation in the HBM market, along with S/D balance are far bigger positives,” the analyst further stated.

Piper Sandler On Micron Technology

Analyst Harsh Kumar maintained a Neutral rating and price target of $70.

“MU reported solid results and handily beat guidance primarily driven by supply discipline in the industry, which is leading to what appears to be setting the foundation for a sustained positive pricing environment,” Kumar said in a note.

“We note that new products such as HBM3E take up 2x the die size of traditional DRAM, which is also contributing to the supply crunch in the industry,” the analyst wrote. “This dynamic throughout the memory industry appears to be bolstering pricing, which is likely to be a tailwind for MU for at least the next 2 quarters and likely longer,” he further stated.

MU Price Action: Shares of Micron Technology had risen by 6.91% to $84.18 at the time of publication on Thursday.

Photo: Courtesy Micron Techonlogy