Wedbush analysts affirmed their positive “Outperform” rating and raised their price target for Micron (MU) shares from $130 to $170 ahead of the company’s earnings announcement next week.
“In our assessment, the main concern for MU is that historical data suggests that the share price is elevated relative to the company’s tangible net assets,” the company’s analysts said in a report.
Wedbush recognizes that while the memory industry experiences regular fluctuations in supply and demand, it expects that the supply of memory chips will not meet demand throughout this year and likely through most of 2025. This Supply shortage is partly due to limited new production of NAND and DDR5 memory chips, which is the result of increased manufacturing capacity needed for high-bandwidth memory (HBM).
“Therefore, we expect average selling prices (ASP), revenues, profit margins and earnings per share (EPS) to increase. Additionally, we expect the company’s financial reserves to grow as the Free Cash Flow (FCF) increases on Micron’s balance sheets,” the analysts said.
“Overall, we expect only favorable developments in Micron’s financial performance for the foreseeable future and expect the company’s stock price to continue to rise until there is a noticeable change in the industry’s investment strategies,” they concluded.
Micron stock rose 2.7% in pre-market trading Tuesday.
This article was produced and translated with the help of artificial intelligence and reviewed by an editor. For further details, please see our Terms and Conditions.
