BofA raises Micron rating and price target after earnings

Micron’s banal has gained a whopping 215.97% twelvemonth to date. The company’s net study for fiscal Q1 2026, released connected December 17, helped alleviate the gloomy ambiance created by Nvidia and Broadcom, which some faced a diminution successful banal worth contempt posting precise beardown net reports.

Micron’s study and the guidance the institution provided for Q2 turned retired to beryllium precise strong, and the banal marketplace reacted positively. Micron closed 10.2% higher astatine $248.55 the time pursuing the net release.

• Revenue of $13.64 cardinal compared to $8.71 cardinal for the aforesaid play past year

• GAAP nett income of $5.24 billion, oregon $4.60 per diluted share

• Non-GAAP nett income of $5.48 billion, oregon $4.78 per diluted share

• Operating currency travel of $8.41 cardinal compared to $3.24 cardinal for the aforesaid play past year

• Revenue of $18.70 cardinal ± $400 million

• Gross borderline of 67.0% ± 1.0%

• Operating expenses of $1.56 cardinal ± $20 million

• Diluted EPS of $8.19 ± $0.20

Bank of America expert Vivek Arya and his squad provided an sentiment connected the MU banal pursuing the net release.

The squad raised its estimates for Micron’s (MU) pro forma EPS for fiscal years 2026, 2027, and 2028 by 62%, 80%, and 42%, to $31.84, $38.85, and $29.15, respectively.

Analysts noted that cardinal risks for Micron banal see volatility of AI demand, pricing of accepted memory, incremental manufacture supply, and the accidental that the existent 68% gross borderline and 60% operating nett borderline are adjacent to highest levels.

Arya stated that portion determination whitethorn beryllium immoderate volatility successful AI demand, HBM is sold retired again passim the calendar twelvemonth 2026, and customers are engaged successful multi-year agreements, which should alteration Micron to person a perchance much sustainable upcycle compared to anterior cycles.

• Larger-than-expected representation mean selling terms decline

• Greater contention from China newcomers

• Share nonaccomplishment to ample competitors

• Softening of request crossed large extremity markets specified arsenic information center,
  smartphones, oregon PCs

In a probe enactment shared with TheStreet, Arya upgraded MU banal standing from neutral to buy, and raised the people terms from $250 to $300, based connected a 2.3 aggregate of his estimation for Micron’s price-to-book ratio for calendar twelvemonth 2027, which is successful the middle/upper scope of Micron’s semipermanent scope of 0.8x to 3.1x. Arya added that the terms people is based connected the presumption that we are perchance successful a representation upcycle.