Micron Technology price target boosted on stronger-than-expected memory pricing

The analysts besides reiterated their ‘Outperform’ standing connected the stock, which traded hands astatine astir $422 connected Friday afternoon.

"Industry pricing is intelligibly amended than MU guided," the analysts noted. While Micron had initially projected astir 30% mean selling terms (ASP) gains for its fiscal 2nd quarter, Wedbush highlighted that first-quarter declaration pricing for DRAM and NAND appeared "well up of expectations," with immoderate contracts adjacent approaching triple-digit gains.

The steadfast besides pointed to continued momentum successful the 2nd quarter. "The setup for CQ2 seems much affirmative than our erstwhile expectations that some NAND and DRAM would apt ascent successful the 30% to 50% range,” the analysts wrote.

Wedbush further observed that conversations with manufacture participants aft the Lunar New Year did not bespeak immoderate slowdown, alternatively showing "continued assistance successful requirements and adjacent tighter proviso dynamics."

Despite the optimism, Wedbush acknowledged immoderate uncertainties successful modeling the interaction connected Micron’s fiscal results. The analysts are "less wide astir however precisely MU's declaration PX compares to manufacture trends, the timing of erstwhile precisely higher prices volition deed MU's income statement, and however assertive absorption volition beryllium successful providing a fiscal Q3 guide." As a result, the steadfast assumed a 40% summation successful fiscal second-quarter pricing and a 25% summation successful fiscal third-quarter results.

Wedbush concluded that, with Micron trading beneath what it considers emblematic highest net multiples, determination is nary crushed to alteration its affirmative outlook.

"Our caller $500 terms people is calculated by applying a 5X aggregate to our caller fiscal twelvemonth 2027 EPS estimates and adding successful nett cash," they wrote, noting that a mid-single-digit aggregate applied to highest net aligns with valuation metrics seen during past representation cycles.