Cantor Fitzgerald analysts increased their price target for Micron Technology (NASDAQ:MU) stock to $180 from $150, maintaining an Overweight rating. The analysts anticipate that Micron’s upcoming earnings report on June 26, will exceed expectations, driven by strong performance in both DRAM and NAND segments, with High Bandwidth Memory (HBM) likely providing an additional boost in revenue for May and August.
Despite concerns about the recent Taiwan earthquake impacting DRAM bit shipments, the analysts believe the effect will be limited due to strategic inventories and robust pricing, which should mitigate any potential downside risks.
The analysts expect these positive trends to continue into the August quarter, leading to higher consensus estimates. Although there are short-term concerns about DRAM pricing, the shift to HBM is expected to sustain a strong pricing environment for DDR5, with second-quarter 2024 pricing projected to increase by 10-15%. Additionally, yield and qualification issues at Samsung for its 12-high HBM product are likely to benefit Micron’s HBM margins and pricing.
Furthermore, the analysts highlighted that Micron’s disciplined approach to NAND supply management continues to support significant price increases in that segment. Overall, the analysts see a favorable outlook for Micron, bolstered by strategic inventory management, strong pricing, and positive trends in both DRAM and NAND markets.