Micron (MU +4.55%) stock bounced back from a two-day slide this morning, gaining 3.3 % through 11:30 a.m. ET.
You can thank Japanese investment bank Mizuho for that.
Image source: Getty Images.
What Mizuho says about Micron
Raising its price target $5 to $270 a share yesterday, Mizuho predicts a sharp rebound in earnings at Micron when the semiconductor company reports earnings Dec. 17. DRAM prices are rising, says Mizuho, and demand for NAND high-bandwidth memory (HBM) for artificial intelligence applications is rising. Currently, less than 10% of Micron's sales come from HBM. But it's of particular note that gross profit margins on DRAM are looking like they will exceed HBM margins by early 2026.
And about 60% to 65% of Micron's DRAM supply contract prices reset quarterly, notes Mizuho, meaning the company should see immediate benefit from the higher prices within just a few months.
NASDAQ: MU
Key Data Points
What to expect from Micron in 2026
Crunching all these numbers and forming a forecast for the coming year, Mizuho predicts Micron will do $56 billion in 2026 revenue and earn $17.89 per share on these sales -- then proceed to grow these numbers 18% (for sales) to $66.1 billion, and 21% (for earnings) to $21.69 in 2027.
At a share price of $235, this means Micron stock -- which costs more than 30 times trailing earnings today -- could cost as little as 13 times next year's earnings, and less than 11 times 2027 forecast earnings.
Think that's cheap enough to buy, with earnings set to grow 21%? So does Mizuho, and so do I.
Micron stock is a GARP buy.
