On Thursday, TD Cowen sustained its favorable stance on Micron Technology (NASDAQ:MU), despite a reduction in the stock's price target. The new target has been set at $125.00, down from the previous $135.00, while the Buy rating remains unchanged. According to InvestingPro data, Micron, currently trading at $85.36, shows strong potential with analysts projecting targets ranging from $70 to $250. The adjustment follows Micron's recent guidance, which did not alter the firm's long-term perspective on the company's growth potential.
The analyst from TD Cowen noted that the after-hours trading reaction to Micron's guidance was unexpected, given the current awareness of the softness in near-term memory pricing. The guidance provided by Micron was not seen as altering the fundamental thesis for the stock.
InvestingPro data reveals impressive revenue growth of 61.59% in the last twelve months, with analysts expecting continued sales growth this year. The firm anticipates that calendar year 2026 will be a period of growth for Micron, and the commentary regarding High Bandwidth (NASDAQ:BAND) Memory (HBM) was aligned with expectations, with Micron increasing the total addressable market (TAM) for HBM.
TD Cowen's outlook suggests that the first half of 2025 is likely to be a phase of mid-cycle normalization for Micron, with the potential for a second wave of growth in the second half of the year. The firm believes that this presents an opportunity for investors.
Supporting this view, InvestingPro analysis indicates the company maintains a healthy financial position with a current ratio of 2.64 and moderate debt levels.
The analyst's comments underscore a conviction that, despite near-term market fluctuations, Micron's long-term prospects remain strong. Get access to over 12 additional InvestingPro Tips and comprehensive financial analysis for Micron through the Pro Research Report.
The analyst reiterated the Buy rating on Micron Technology, signaling confidence in the company's future performance. This perspective is based on the anticipated growth year in 2026 and the positive developments in Micron's HBM market expansion.
Micron Technology, listed on NASDAQ:MU, continues to be seen as a solid investment by TD Cowen, with expectations of a mid-cycle normalization followed by a stronger second half in 2025. The firm's maintained Buy rating reflects this positive outlook, despite the recent adjustment to the stock's price target.
In other recent news, Micron Technology's financial performance and future outlook have been keenly analyzed by several financial firms. Micron's November quarter capital expenditures were reported at $3.1 billion, below the expected $3.4 billion, with the company also projecting a lower-than-expected capex for the February quarter.
However, Micron's forecasted capex of $14 billion for fiscal year 2025 aligns with the Street's projections. Citi's recent report highlighted potential negative implications for the U.S. semiconductor equipment industry, following Micron's financial disclosures.
Despite a dip in the F2Q outlook, KeyBanc maintained an Overweight rating on Micron, emphasizing strong F1Q performance and year-over-year revenue growth. Other firms including Needham, JPMorgan, Wolfe Research, and Stifel also made adjustments to their price targets for Micron, citing factors such as softer demand in consumer markets and data center solid-state drives.
In terms of product developments, Micron's High Bandwidth Memory (HBM) revenue more than doubled quarter over quarter, leading to an increase in the Total (EPA:TTEF) Addressable Market (TAM) estimate for HBM to over $30 billion by 2025. Despite challenges in the NAND sector, the company's data center DRAM segments are projected to remain robust.
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