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On Thursday, BofA Securities up to date its outlook on Micron Expertise (NASDAQ:MU) inventory, elevating the worth goal to $125 from the earlier $110, whereas reaffirming a Purchase score.
The revision follows Micron’s efficiency, which has been bolstered by sturdy knowledge middle demand, particularly with the expansion in gross sales of high-bandwidth reminiscence (HBM) leveraged by synthetic intelligence.
Micron’s latest monetary outcomes surpassed expectations, even amidst broader macroeconomic challenges like declining demand for PCs and smartphones.
The corporate’s administration has projected a file fiscal yr 2025, growing the entire addressable market (TAM) for HBM to over $25 billion from $20 billion. This improve is supported by sturdy pricing and market share visibility.
Moreover, Micron’s gross margins for the fourth fiscal quarter and the primary quarter have been notably larger than anticipated, coming in at 36.5% and 39.5% respectively, in comparison with the consensus estimates of 34.6% and 37.8%.
Regardless of an anticipated softer second fiscal quarter resulting from seasonality, BofA Securities has elevated its fiscal yr 2025 and 2026 earnings estimates for Micron by 22% and 31%, to $7.18 and $9.87 per share respectively.
The brand new worth goal displays a price-to-book a number of of two.5 occasions the calendar yr 2025 estimates, a rise from the earlier 2.2 occasions, whereas remaining inside Micron’s historic vary of 0.8 to three.1 occasions.
BofA Securities forecasts that Micron’s HBM gross sales might attain $4 billion within the calendar yr 2025, which might give the corporate roughly a 16% share of the market. There’s potential for a good larger market share, probably over 20% or $5 billion, if the HBM section continues to be dominated by solely Micron and Hynix.
The agency additionally notes that Micron’s power within the knowledge middle sector is a optimistic indicator for different corporations within the trade, together with Nvidia (NASDAQ:), Broadcom (NASDAQ:), Marvell Expertise (NASDAQ:), Superior Micro Units (NASDAQ:), and KLA Company (KLAC), in addition to the broader semiconductor capital tools sector.
In different latest information, Micron Expertise Inc (NASDAQ:). has projected an optimistic income forecast for the primary quarter, surpassing market expectations resulting from sturdy demand for its excessive bandwidth reminiscence (HBM) chips. The corporate has projected revenues to be round $8.70 billion, larger than analyst estimates of $8.28 billion.
Nonetheless, CFRA, a monetary analysis agency, has adjusted its outlook on Micron, decreasing the inventory’s worth goal from $170 to $140, whereas sustaining a Purchase score. The agency expects a gross margin of 34.5% for a similar interval and forecasts income of $8.3 billion for the November quarter.
Likewise, Rosenblatt Securities maintained a Purchase score on Micron with a gentle worth goal of $225.00, regardless of potential pressures on common promoting costs. TD Cowen additionally maintained a Purchase score on Micron however diminished the worth goal from $160.00 to $115.00, citing the present destructive sentiment and steady long-term fundamentals.
Stifel adjusted its worth goal for Micron to $135, down from $165, however maintained a Purchase score. This adjustment comes as Micron prepares to launch its fiscal fourth quarter earnings report.
Regardless of these changes, Micron has launched its Essential P310 2280 Gen4 NVMe solid-state drive (SSD), which guarantees double the efficiency of Gen3 SSDs and a 40% pace improve over its predecessor.
This text was generated with the help of AI and reviewed by an editor. For extra info see our T&C.
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