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Micron Gains on Bernstein’s Upgrade to Outperform, Target $94

Stock Markets Mar 16, 2022 07:38AM ET
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By Dhirendra Tripathi

Investing.com – Micron Technology (NASDAQ:MU) stock traded 4.7% higher in premarket Wednesday on Bernstein upgrading it to ‘outperform’ with a $94 target, around 29% higher than its previous close of $73.11.

Analyst Mark Li earlier rated the stock ‘perform’ with a $58 target.

The stock is down around 18% in the last year against NASDAQ Composite's loss of 3.8% and 7.4% gains in S&P 500. It has lost 27% in 2022 so far.

Li said macro concerns have prompted a selloff, but a correction to the memory market, if any, won't be prolonged and won't change the structure, according to The Fly.

The analyst's base case has the DRAM cycle bottoming in six months. The analyst ruled out notable supply disruption or demand destruction in the near term due to the ongoing Russia-Ukraine conflict.

DRAM or dynamic random access memory chips, which go into both personal computers and servers, accounted for 72% of the company’s FY21 revenue. The pandemic provided a big boost to the industry as people and corporates pivoted to digital and demand for devices grew. That demand, though reduced from its peak, stays elevated. 

Li noted that valuations in the global memory chip sector have fallen, "providing a favorable risk/reward tradeoff now."

The company will declare its second-quarter numbers on March 29.

 

Micron Gains on Bernstein’s Upgrade to Outperform, Target $94
 

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