Micron Stock: Goldman & Others Raise Price Targets

Posted On September 20, 2017 3:06 pm

NAND Flash Drive

Micron Technology, Inc. (NASDAQ:MU) is one of the biggest providers of DRAM and NAND products. The demand for NAND flash chips is surging worldwide as they are a necessary component of almost all IoT, AI and Big Data devices. A recent report suggests that NAND market worth is expected to cross $65 billion in 2020, compared with $40 billion in 2017.  NAND revenues will overtake DRAM revenues by the end of 2020. Micron enjoys almost 13% share of the lucrative NAND market. Micron Technology is in an excellent position to benefit from the industry trends. We believe that Micron stock is a strong buy.

Micron is increasing traction in emerging markets by acquiring new companies. The company completed its $4 billion acquisition of Taiwan-based Inotera in December. Micron also acquired Elpida and Rexchip to increase its penetration in Japan and Taiwan.

Earlier this week, Evercore ISI analyst C.J. Muse raised his price target for Micron to $50 from $40. The analyst has a “Buy” rating for the stock. Muse said that he is upping his price target on the back of DRAM strengths. The analyst noted that the demand in the DRAM sector is set to increase in the coming quarters.

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The demand for DRAM will rise because of increasing data creation, storage needs and processing requirements.  Muse also likes Micron CEO Sanjay Mehrotra’s emphasis on execution and his cleanup of the balance sheet.

On Tuesday, investment firm Susquehanna’s Mehdi Hosseini also raised his price target for Micron stock to $50. The analyst also reiterated his “Positive” rating on the shares. Hosseini expects Micron to report excellent margins and revenues for the fourth quarter. It should be noted that Micron will announce Q4 results on September 26.

Muse’s bullish rating comes on the heels of the report from Goldman Sachs’s Mark Delaney, in which he increased his rating for the stock to “Buy” from “Neutral” and set a price target of $40. Delaney also based his thesis on the continued strength in the DRAM market.

Micron Technology is up 64% since the start of this year.

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