Stifel analysts lowered their price target for Micron Technology (NASDAQ:MU) to $135 from $165 while maintaining a Buy rating ahead of the company’s fiscal fourth-quarter earnings report, scheduled for September 25.
The analysts noted that memory prices have been stabilizing over the past year but have shown signs of moderating in recent months. While demand for high-bandwidth memory (HBM) remains strong and concerns about oversupply next year seem unfounded, underwhelming consumer electronics sales and product mix could create a temporary market lull in the coming quarters. Memory suppliers may hesitate to increase bit shipments at the expense of lowering prices, which could affect the market dynamics.
The analysts expect Micron to deliver results in line with expectations for its fourth quarter but lowered their estimates for the first and second quarters of fiscal 2025, reflecting a less favorable average selling price (ASP) environment. Despite the price target adjustment, they believe the recent pullback in Micron’s stock, along with its current valuation at 2.0-2.5x tangible book value, presents a buying opportunity.