Micron Technology stock has room to run further but watch out for a peak in memory prices next year. That's the message from Citi analysts looking ahead to the company's earnings next week.
Its shares were down 0.3% at $1,093.44 in premarket trading, after a 5% rise the previous day. The stock has risen 18% in the past five trading sessions as investors look ahead to its earnings report on Sept. 30.
Citi analyst Atif Malik broadly shares the positivity, raising his target price on Micron to $1,300 from $1,150 in a research note Wednesday. He's backing the company to report fiscal fourth-quarter sales of $51 billion and earnings per share of $31.45, beating consensus estimates, and to grow again in the current quarter.
However, Malik's target is one of the lowest on Wall Street according to FactSet-some way below the average price target of about $1,573. And that seems to be because he still forecasts memory prices will peak in the second quarter of 2027, earlier than the majority of commentators who point to 2028 or even later.
Malik has been consistently skeptical on how long the memory boom can last, citing the threat of increasing Chinese supply. He lowered his price target on Micron Technology to $1,150 from $1,400 in August.
Optimists note that Micron has locked in long-term supply agreements with many of its major customers, which set a ceiling on its prices, in exchange for guaranteeing long-term margins. That could mean the company's normal cyclicality-where earnings rise and fall sharply along with memory-chip supply-and-demand cycles-is reduced and it could weather a downturn more successfully.
Barron's previously argued Micron could double in price, when it was trading around $1,100.
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