Micron Technology Inc
What Happened: Wedbush analyst Matt Bryson on Tuesday maintained an Outperform rating on the stock and raised his price target from $130 to $170 as the analyst anticipates a beat-and-raise quarter next week.
Bryson believes average selling prices were significantly higher than what was expected in the quarter. The analyst noted that NAND was likely up 25% quarter-over-quarter, while DRAM grew around 17%. As a result, Bryson now expects Micron to report earnings of 64 cents per share and revenue of $6.93 billion, easily exceeding consensus estimates.
Micron is due to report earnings for its fiscal third quarter after the market close on June 26. Analysts are looking for earnings of 49 cents per share and revenue of $6.634 billion, according to Benzinga Pro.
"And, we'd note we see a strong probability that MU still exceeds our revised price assumptions on mix benefits," Bryson said.
The Wedbush analyst expects strength to continue into the fourth quarter with DRAM pricing up another 12% and NAND pricing up 11%. Bryson would not be surprised if Micron provides more cautious guidance than what he is modeling, but he expects guidance to "significantly exceed consensus" either way.
The analyst expects memory to remain in undersupply through the end of the year and likely for much of 2025. Given the supply dynamics, he believes average selling prices, revenue, margins and EPS are all "destined to cycle higher."
"Net, we expect only positive news for MU's financials for some time to come, and expect the stock will continue to lift until we see a change in industry investment plans," Bryson said.
MU Price Action: Micron shares were up 6.3% at $157.14 at the time of publication, according to Benzinga Pro.
