Analysts raised their forecasts on Micron stock ahead of the report. What to pay attention to?

Ahead of the quarterly report of memory manufacturer Micron, several investment banks raised their forecasts for the company's revenue and target prices for its shares. Analysts noted the revival of demand for RAM and flash memory, growing interest in cloud services and positive expectations for the market of high-speed HBM memory. However, some warned of risks ranging from price pressure due to Nvidia's dominance to uncertainty over Chips Act subsidies. In trading on September 23, just before the report, Micron shares jumped almost 3%.

- Morgan Stanley analyst Joseph Moore raised his revenue forecast for Micron from $11.9 billion to $12.5 billion ahead of the company's quarterly report, which will be released after the close of trading on Sept. 23, MarketWatch reports. Moore cited rebounding demand in the DRAM and NAND flash memory markets and rising prices. A shortage of components for computing infrastructure will lead to higher prices, he said. The analyst is optimistic about Micron's future in terms of high-speed HBM memory, but he warned: Nvidia's monopoly position as the only buyer of the latest HBM could put pressure on prices by the end of the year.

The key driver for shares of Micron will be not so much exceeding Wall Street forecasts for revenue, as clarification of prospects for the HBM market by 2026 and plans for capex, says Morgan Stanley. At the same time, the analyst reminded that large expenses limit cash flow, and the timing of the $6.1 billion in Chips Act incentives remains uncertain. Against this backdrop, he raised the target price of the company's securities from $135 to $160, which is in line with the last close, and maintained a neutral Equal-Weight rating, Guru Focus reports.

- The analyst of investment firm Stifel Brian Chin is more positive. He raised the target on shares of Micron from $145 to $173 and confirmed the rating Buy, writes Seeking Alpha. Stifel's new target implies a 5% increase in the company's market value from the last close. According to Chin, the main driver of Micron's revenue growth will be the increasing demand for data storage, especially eSSDs, from cloud customers. He expects flash memory shipments to accelerate in 2026 and memory prices to rise through the end of 2025, so he also raised revenue forecasts for fiscal and calendar 2026 and the first quarter of fiscal 2025.

- Wedbush also revised its target price on Micron securities - from $165 to $200 - and reiterated an Outperform rating equivalent to a "buy" advisory, Barron's reports. The investment firm's new target is 21% above Monday's closing level. Wedbush analysts noted an unexpected surge in demand for different types of memory hardware from cloud service providers in recent weeks. While it's unclear why those companies are now buying more memory chips, "this change should adjust future expectations markedly," Wedbush analysts Matt Bryson and Antoine Legault pointed out in a note cited by Barron's. Against that backdrop, they raised their revenue forecasts for Micron for the rest of 2025 and 2026, but urged caution because of the lack of clear reasons for the jump in demand.

- Barclays analyst Tom O'Malley also reiterated a buy recommendation on Micron shares and raised his target price from $140 to $175. Barclays believes that the surge in demand for flash memory may be temporary and related to the large purchases in Silicon Valley the week before last. However, O'Malley expects Micron to report results slightly above expectations and provide a much stronger outlook for the coming quarters.

Wall Street consensus expects Micron to report revenue of $11.2 billion in last quarter's report, among which the RAM segment will account for $8.8 billion and flash memory segment will account for $2.3 billion, MarketWatch reports, citing FactSet data. Adjusted earnings per share will be $2.86, according to these estimates.

At the auction on September 23, quotations of Micron jumped by 2.6% - to $ 168.9. Over the past month, the company's securities rose in price by 42.5%, showing the best monthly growth over the past 15 years, notes Bloomberg. However, despite this, they remain cheaper than competitors, the agency adds. Micron shares are trading at a multiple, which reflects the ratio of price to projected earnings, of about 12, compared with 26 for the Philadelphia Semiconductor index and 32 for Nvidia shares.

The vast majority of analysts tracking the company's performance - about 86% - advise investing in Micron. But Wall Street's average target price of $166.4 is just 1% above the close of September 22.

This article was AI-translated and verified by a human editor