Micron Tech: BMO Drops Price Target To $105

Micron Technology (NASDAQ: MU) has had 4 analysts cut their 12-month price targets recently, prior to the firm reporting financial results on September 28.

Micron Technology currently has 38 analysts covering the stock with an average 12-month price target of $112.68, down from the $115.84 average just a month ago. Out of the 38 analysts, 9 have strong buy ratings, 22 have buy ratings and 7 have hold ratings. Elazar Advisors has the street high price target of $172, while the lowest comes in at $75.

BMO Capital Markets was one of the firms that lowered their 12-month price target, dropping it from $110 to $105 while reiterating their outperform rating on the stock, saying that DRAM pricing had become a lot weaker than what they had forecasted over the next two quarters. They believe that this weakness is only temporary and not the start of a much longer downturn in DRAM pricing.

In BMO’s scenario analysis, they say that their new $105 price target is the base case with Micron normalized earnings, but believe that the upside is potentially $130, “in a stronger up-cycle than we are currently modeling for, driven by sustained higher ASPs.” While their downside analysis suggests a $65 price target.

BMO believes that there are two main reasons for DRAM pricing to move lower in the next few quarters. They write, “1) excess buying in anticipation of perceived tightness in DRAM and elsewhere earlier in the year, and 2) due to certain end markets, which were the tightest late last year/early this year, such as PCs, starting to ease/weaken.”

They also believe that the “buys have hit a pause button,” rather than a cyclical downturn approaching. They comment that DRAM is one of the products that were likely to have the supply-chain build inventory faster than other computer-related parts.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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