Ahead of its upcoming earnings report, Micron Technology (MU) received a significant boost in its price target, reflecting a positive outlook for 2024 in the recovering memory-chip market. The announcement led to a notable surge in Micron stock on Monday.
Analyst’s Perspective: UBS analyst Timothy Arcuri reaffirmed his buy rating on Micron stock and increased the 12-month price target from 76 to 90. According to Arcuri’s report, Micron’s bright prospects for 2024 are attributed to the ongoing recovery in the memory-chip market.
Market Reaction: Following the analyst’s report, Micron stock experienced a robust response in the market, with a 3.8% surge to close at 77.79 on Monday.
Expectations for Earnings Report: Arcuri expressed optimism about Micron’s upcoming quarterly report, anticipating “strong guidance” that is likely to contribute to the stock’s positive momentum. He foresees Micron stock continuing its upward trajectory throughout the calendar year 2024.
Recent Breakout and Performance: Notably, Micron shares broke out of a flat base on November 3, surpassing a buy point of 72.31, as indicated by IBD MarketSmith charts. Currently, Micron stock is positioned beyond the 5% buy zone, aligning with IBD trading principles.
On November 28, Micron raised its guidance for revenue and earnings for the fiscal first quarter that concluded on November 30. The company attributed the positive adjustment to an improved supply and demand balance and better pricing. Micron is scheduled to release its fiscal Q1 results on December 20.
Memory Chip Market Trends: Arcuri highlighted encouraging trends in the memory-chip market, forecasting over 15% growth in contract prices for DRAM and Nand memory chips in the calendar fourth quarter compared to the third quarter. Additionally, he indicated that prices are expected to rise at least 10% in the first quarter following the December quarter.
Stock Analysis: Despite the positive developments, Micron stock currently holds a middling IBD Composite Rating of 56 out of 99, according to IBD Stock Checkup.
In conclusion, the upgraded price target and positive outlook for Micron Technology underscore its resilience and potential for growth in the dynamic semiconductor industry. Investors are keenly awaiting the forthcoming earnings report as Micron continues to navigate the evolving market landscape.
