Shares of Micron Technology (NASDAQ:MU) headed higher on Tuesday, after receiving not one, not two, but three analyst upgrades before the market opened. Common reasons for the upgrades include an improving semiconductor market and Micron's inexpensive shares, leading to hiked price targets across the board. Investors love these votes of confidence. Consequently, Micron stock was up 4% as of 1:20 p.m. EST.
According to The Fly, Mitch Steves of RBC Capital maintains the belief that Micron stock can outperform the market and is upping the stock's price target from $57 per share to $83 per share. Deutsche Bank analyst Sidney Ho is just a tad bit more bullish than Steves, giving Micron stock an $85 per-share price target, citing upcoming improvement in prices and sales volume for the memory products Micron sells.
However, the biggest upgrade came from Citi analyst Christopher Danely. Danely previously had a sell rating on Micron stock with a measly price target of $35 per share. But this morning, Danely did a complete 180, giving Micron stock a buy rating with a $100 per-share price target. Even with today's gains, Danely's price target gives Micron stock almost 30% upside.
Investors inclined to jump on these analyst upgrades should keep something very important in mind: These analyst opinions can change on a dime. For example, just a few months ago prior to Micron's fourth-quarter earnings report, Danely kept a bearish outlook on its stock. What changed since then to triple Micron's price target?
My point is these upgrades need to be taken with a grain of salt. Investors should by all means read financial news like this. Analysts seem to believe the cyclical semiconductor industry is poised for success in 2021 -- that's good to know. But it would also be beneficial to look for dissenting opinions to better form your own informed opinion. Alternatively, investors could just wait to hear from Micron's management on the subject when it reports earnings on Jan. 7.