Micron shares target raised to $120 on supply/demand outlook

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On Monday, Micron Technology (NASDAQ:) saw its price target increased to $120 from the previous $100 while retaining an Overweight rating by Cantor Fitzgerald. The adjustment reflects a positive outlook for the company’s performance in the semiconductor market.

The firm anticipates a strong earnings report from Micron, with management expected to indicate tightening supply/demand trends for both DRAM and NAND markets throughout 2024. This is attributed to the over-subscription at leading edge nodes for these technologies. Additionally, conservative capital expenditure across the industry, with the exception of High Bandwidth (NASDAQ:) Memory (HBM), is predicted to support price increases over the calendar year.

Despite recent concerns about contract pricing declines in the fourth quarter of 2024, the analyst suggests that the near-term prospects for Micron are favorable, while acknowledging potential longer-term uncertainties. The firm advises that it is premature to worry, given Micron’s return to profitability and the expectation that positive supply/demand dynamics will persist into 2025, along with positive estimate revisions for that period.

The firm’s stance is further bolstered by the growing excitement around artificial intelligence, where Micron’s strong position in HBM3E is expected to be advantageous. The upgraded price target to $120 reflects a 15 times multiple on the anticipated earnings power of over $8 per share in the calendar year 2025.

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