Wedbush analysts reiterated an Outperform rating and raised their target price on Micron (NASDAQ:MU) shares from $130 to $170 ahead of the memory chipmaker’s upcoming earnings report next week.
“In our view, the primary question with MU is history suggests the stock is expensive vs. asset levels,” the firm’s analysts said in a note.
Wedbush acknowledges that while memory remains a cyclical industry, they believe it will stay in undersupply through this year and likely much of 2025. This is attributed to a lack of new investment in NAND and DDR5, partly due to increased capacity requirements for High Bandwidth Memory (HBM).
“As such, we believe Average Selling Prices (ASPs), revenues, margins, and EPS are all destined to cycle higher, with book also set to lift as FCF flows on to MU's balance sheet,” analysts wrote.
“Net, we expect only positive news for MU's financials for some time to come, and expect the stock will continue to lift until we see a change in industry investment plans,” they added.
Micron shares climbed 2.7% in premarket trading Tuesday.