On Thursday, Citi reaffirmed its positive stance on Micron Technology (NASDAQ:MU) shares, maintaining a Buy rating and a $175.00 price target. This decision came after Micron Technology reported financial results and forecasts that surpassed consensus expectations, propelled by increased pricing. The company's stock experienced a decline which Citi attributes to conservative future guidance and heightened capital expenditure.
Micron Technology, which trades on NASDAQ under the ticker NASDAQ:MU, disclosed its earnings after the market closed on Wednesday. The company's performance exceeded analyst predictions, leading to a more optimistic outlook. Despite this, the stock saw a downturn, which Citi suggests presents a buying opportunity for investors.
Citi's analysis indicates confidence in Micron's long-term prospects, particularly within the DRAM market. The firm anticipates Micron to demonstrate progressive growth in revenue, earnings per share (EPS), and gross margins through calendar year 2025. This growth expectation is underpinned by the belief that the DRAM industry's upward trajectory remains unaltered.
The investment firm's reiterated price target of $175.00 reflects a continued endorsement of Micron as its top selection within the sector. According to Citi, the recent pullback in Micron's share price should be seen as a chance to invest in a company positioned to capitalize on the anticipated DRAM upturn.
In other recent news, Micron Technology has been the focus of several analyst firms. Goldman Sachs (NYSE:GS) maintained a Buy rating on Micron and raised the target price to $158, citing the company's anticipated growth in AI compute and market share gains in the High-Bandwidth Memory market. JPMorgan (NYSE:JPM) also maintained an Overweight rating, increasing its price target to $180, due to Micron's strong earnings outlook for the August quarter. However, Aletheia Capital downgraded Micron's stock from Buy to Hold due to concerns over Micron's High Bandwidth (NASDAQ:BAND) Memory 3E (HBM3E).
Micron Technology recently outperformed revenue estimates for its third quarter, reporting a revenue of $6.81 billion, driven by increased demand for memory chips from the AI industry. The company also announced a raised capital expenditure forecast for fiscal year 2024 to $8 billion, which includes greenfield fabs in Idaho and New York.
In other developments, the company anticipates receiving $6.1 billion in grants from the U.S. CHIPS Act, an initiative aimed at strengthening the domestic semiconductor industry. Entegris (NASDAQ:ENTG), a supplier for the chip manufacturing industry, has also secured a preliminary agreement for a grant of up to $75 million from the Biden administration to develop a new facility in Colorado Springs.
InvestingPro Insights
As Micron Technology (NASDAQ:MU) garners attention following Citi's optimistic assessment, investors may find additional value in considering the latest InvestingPro data and insights. With a market capitalization of $156.27 billion, Micron stands as a significant player in the semiconductor space. Notably, the company has demonstrated a remarkable one-year price total return of 114.4%, highlighting strong recent performance. Despite a negative P/E ratio of -41.21 indicating recent unprofitability, analysts predict a turnaround, with the company expected to be profitable this year.
InvestingPro Tips suggest that Micron has raised its dividend for three consecutive years, signaling confidence in its financial health and commitment to shareholder returns. Additionally, the company's substantial price increase over the last six months, combined with a 19.49% total return over the past three months, underscores a positive momentum that aligns with Citi's bullish stance. Investors looking to delve deeper into Micron's prospects can access a wealth of further insights on InvestingPro, with 11 additional tips available to guide investment decisions.
For those considering a deeper analysis, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. This exclusive offer will provide access to comprehensive data and expert insights that can help inform investment choices in the rapidly evolving tech sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.