On Thursday, Cantor Fitzgerald exhibited a positive stance on Micron Technology (NASDAQ:MU) shares, raising the price target to $135 from the previous $120, while reiterating an Overweight rating. The revision follows Micron's announcement of a robust May quarter outlook, which exceeded expectations and suggested a promising earnings run-rate.
Micron Technology's recent financial outlook points to a notably strong performance, particularly when considering a normalized tax rate. This adjustment indicates an annualized earnings run-rate that could surpass $2.00 at this stage in the cycle, which is more optimistic than initial market expectations. Cantor Fitzgerald's analysis also forecasts a tight supply for DRAM and NAND throughout the 2024 calendar year.
The analyst's review underscores Micron's potential for a successful ramp-up of its HBM3e technology. This advancement is expected to contribute to the company achieving an annualized earnings per share (EPS) run-rate of $7-8 by the end of 2024. Moreover, Micron's management has projected record corporate revenues for the fiscal year 2025, a vision that the analyst supports.
In light of the recent developments and the company's outlook, Cantor Fitzgerald has adjusted its model for Micron's EPS in the calendar year 2025 to $9.00, which is higher than the consensus estimate of $8.03. The firm cites that there is a clear risk to the upside in this estimation. The price target adjustment to $135 is based on maintaining the same 15x multiple on a heightened EPS outlook, as the firm remains confident in Micron's performance trajectory.
InvestingPro Insights
Following Cantor Fitzgerald's upbeat assessment of Micron Technology and their increased price target, it's worth looking at some real-time metrics and InvestingPro Tips that can further inform investors about the company's current financial health and market position.
The market capitalization of Micron Technology stands at a robust $122.99 billion, reflecting the company's significant presence in the industry. Despite a challenging period, Micron has managed to maintain a positive price momentum, with a 1-year total return of 65.3%, signaling strong investor confidence and market performance. This aligns with the analyst's optimistic view and suggests that the company's strategic initiatives are resonating with the market.
However, Micron's current P/E ratio is negative at -17.56, indicating that the company has reported a loss in the last twelve months as of Q1 2024. This could be a point of concern for investors looking for current profitability, but it's important to note that analysts have revised their earnings upwards for the upcoming period, suggesting potential for improvement. Additionally, the company's dividend yield stands at 0.48%, which, while modest, reflects Micron's commitment to returning value to shareholders, having raised its dividend for 3 consecutive years.
InvestingPro Tips highlight that Micron is a prominent player in the Semiconductors & Semiconductor Equipment industry and is anticipated to see sales growth in the current year. These factors, coupled with the company's strong price performance over various time frames, including a 6-month price total return of 42.18%, may offer investors a reason for optimism despite the current lack of profitability.
For those interested in a deeper analysis and additional insights, InvestingPro offers more tips on Micron Technology, which can be accessed at https://www.investing.com/pro/MU. Investors can benefit from an additional 10% off a yearly or biyearly Pro and Pro+ subscription by using the coupon code PRONEWS24. There are 11 more InvestingPro Tips available that could further inform investment decisions regarding Micron Technology.
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