Raymond (NS:RYMD) James expresses confidence in a higher peak multiple for Micron's stock, citing the growth of HBM as a particularly strong secular trend within the industry. The firm's reiteration of the Outperform rating underscores their optimistic outlook for Micron Technology (NASDAQ:MU)'s financial performance and market position.
According to InvestingPro's comprehensive analysis, Micron maintains a healthy financial position with a current ratio of 2.64 and moderate debt levels, supporting its ambitious growth plans. Access the full Pro Research Report for detailed insights into Micron's valuation and growth prospects. According to InvestingPro's comprehensive analysis, Micron maintains a healthy financial position with a current ratio of 2.64 and moderate debt levels, supporting its ambitious growth plans.
Access the full Pro Research Report for detailed insights into Micron's valuation and growth prospects. Micron's blended Dynamic Random-Access Memory (DRAM) Average Selling Price (ASP) is anticipated to continue its upward trend, bolstered by the ramp-up of High Bandwidth (NASDAQ:BAND) Memory (HBM), which commands a price approximately five times higher than that of DDR (NYSE:SITC) ASPs.
According to the firm's calculations, Micron would need to generate over $1 billion in HBM revenue in the February 2025 quarter to align with the current consensus for a blended ASP increase of around 2.5%. This expectation mirrors the company's own market share target, aiming for low 20% at some point in calendar year 2025. The firm acknowledges the difficulty in predicting the ramp's linearity and opts for a conservative viewpoint as a result.
Raymond James expresses confidence in a higher peak multiple for Micron's stock, citing the growth of HBM as a particularly strong secular trend within the industry. The firm's reiteration of the Outperform rating underscores their optimistic outlook for Micron Technology's financial performance and market position.
According to InvestingPro's comprehensive analysis, Micron maintains a healthy financial position with a current ratio of 2.64 and moderate debt levels, supporting its ambitious growth plans. Access the full Pro Research Report for detailed insights into Micron's valuation and growth prospects. The current DRAM upcycle is expected to persist through 2025, with a potential earnings per share (EPS) peak at around $12, more than $2 of which could be attributed to HBM.
Raymond James expresses confidence in a higher peak multiple for Micron's stock, citing the growth of HBM as a particularly strong secular trend within the industry. The firm's reiteration of the Outperform rating underscores their optimistic outlook for Micron Technology's financial performance and market position.
In other recent news, Micron Technology has been garnering attention from industry analysts as they anticipate the company's first-quarter earnings report. JPMorgan (NYSE:JPM) analyst Harlan Sur reiterated an Overweight rating and a $180.00 price target on Micron, suggesting a potential revenue and EPS beat due to a favorable product mix and strong shipments. Meanwhile, Citi analyst Christopher Danely also maintained a Buy rating and a $150.00 price target, forecasting slightly below consensus results due to legacy DRAM weakness but remained positive about DRAM recovery in 2025.
Susquehanna International Group also maintains a Positive rating on Micron shares with a price target of $165. Analysts believe that despite current softness in DRAM and NAND Average Selling Prices (ASPs), Micron's increased market share in High Bandwidth Memory (HBM) and DDR5 will bolster its earning potential.
Analysts from JPMorgan and Susquehanna predict a mixed outlook for the second quarter, with revenues, gross margin, and EPS likely to be guided below consensus due to persistent headwinds in traditional DRAM pricing. However, this may be offset by a shift towards higher-margin HBM products, where Micron is gaining market share on key Nvidia (NASDAQ:NVDA) platforms.
Despite these near-term challenges, analysts expect gross margins for the second quarter to remain stable or improve slightly as Micron executes on cost reductions and HBM becomes a more significant part of the revenue mix. This is in line with JPMorgan's projection that Micron's shares are positioned to outperform in early to the first half of 2025 as the market begins to anticipate a recovery in memory pricing for the latter part of the year.
In terms of recent developments, Micron Technology secured a substantial subsidy of over $6.1 billion from the U.S. Department of Commerce to support domestic semiconductor manufacturing. The company also debuted its 6550 ION NVMe™ SSD, a 60TB data center SSD, the first of its kind to support E3.S and PCIe Gen5 standards.
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