Micron Technology Receives Baird Upgrade to Buy on Positive DRAM Trends

Baird's Tristan Gerra upgraded their rating on Micron Technology (NASDAQ: MU) from Hold to Buy on 2024/05/06. The analyst also raised their price target by 30.4% from $115 to $150.

Gerra explained that the decision to upgrade Micron Technology was driven by the firm's belief in "meaningful upside opportunities ahead" for the company. According to the analyst, recent channel checks conducted by Baird have revealed positive trends in the dynamic random access memory (DRAM) market, which is a key segment for Micron. Gerra noted that the stock's recent pullback does not align with these positive trends, creating an attractive entry point for investors.

The channel checks indicated that DRAM pricing is stronger than previously anticipated, with a growing mix of premium-priced DDR5. Additionally, Gerra highlighted the potential of HBM3E, a high-bandwidth memory technology, to generate gross margins exceeding 60% for Micron in the coming year.

This upgrade comes as Micron Technology prepares to report its Q3 2024 earnings on June 26, 2024. The company's stock has shown impressive performance, with a year-over-year increase of 97.4%. During the same period, Micron outperformed the S&P 500, which posted a gain of 25.2%.

Baird's analyst Tristan Gerra has gained recognition for their expertise in the Consumer Cyclical and Technology sectors. With an average return of 9.5% and a win rate of 50.8%, Gerra ranks in the top 17% of Wall Street analysts, according to WallStreetZen.

Currently, 95.5% of top-rated analysts rate Micron Technology as either a Strong Buy or Buy. None of the analysts recommend holding the stock, while 4.5% suggest selling it.

Micron Technology, Inc. is a global leader in the design, manufacturing, and sale of memory and storage products. The company operates through four business units: Compute and Networking, Mobile, Storage, and Embedded. Its product portfolio includes DRAM, NAND, and NOR memory products, catering to various markets such as cloud servers, enterprise clients, graphics, networking, smartphones, and other mobile devices. Micron also offers solid-state drives (SSDs) and component-level solutions for enterprise, cloud, client, and consumer storage markets, as well as memory and storage products for automotive, industrial, and consumer applications. Headquartered in Boise, Idaho, Micron Technology was founded in 1978.

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