With Micron Technology, Inc. (NASDAQ:MU) preparing to release fiscal first-quarter earnings on December 21, Brean Capital analyst Mike Burton weighed in today with his prediction. As Burton believes that MU’s cost cutting internal priorities are still on track, he reiterates a Buy rating on the stock, while increasing the price target to $25 (from $23).
The analyst wrote, “Micron is set to report its Nov-Q on Wednesday December 21st, and while very conservative guides have become the new norm, we like the industry dynamics heading into the 1H17 and MU’s earnings power potential. MU pre-announced last week that its Nov-Q would come in above expectations driven by strong DRAM pricing.,
“Coming back from our trip to Asia last week, we believe that favorable near-term supply chain fundamentals for both DRAM and NAND will likely persist through the middle of CY17. Inventory levels in DRAM and NAND remain around ~ 1 week vs. normal levels of 3-4 weeks. Looking beyond these near-term favorable trends, we continue to like MU as it is in the early part of a positive DRAM cycle driven in part by industry-wide cuts to CAPEX last year, decreasing bit growth in DRAM shrinks, and less DRAM competitors. In addition, in non-volatile memories (3D NAND and XPoint), NAND remains tight as well until 3D ramps occur (likely in 2H17) and will help contribute to its earnings power going forward and could become a key future differentiator,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mike Burton has a yearly average return of 8.9% and a 57% success rate. Burton has an 39.6% average return when recommending MU, and is ranked #245 out of 4240 analysts.
Out of the 32 analysts polled by TipRanks, 23 rate Micron Technology stock a Buy, 6 rate the stock a Hold and 3 recommend Sell. With a return potential of 1.8%, the stock’s consensus target price stands at $18.94.