Micron (MU +2.77%) stock jumped nearly 5% in early trading Monday, before retreating to about a 1.8% gain as of 10:10 a.m. ET.
You can thank investment banker Stifel for that.
Image source: Micron.
Stifel loves Micron stock
Stifel analyst Brian Chin reiterated his buy rating and his $1,500 price target on Micron this morning, as StreetInsider.com reports.
With barely a week left to go before Micron reports Q4 earnings (on Sept. 30), Chin took a look ahead today to see how the maker of semiconductor memory chips might fare. On average, Wall Street analysts predict Micron will grow sales by 350% to $51 billion, with earnings growing 10x -- $31.35 per share. Chin doesn't necessarily disagree with these numbers -- and thinks Micron might even beat them -- but he warns investors to start preparing to see Micron report "more measured rate-of-upside than in recent quarters." Which is to say, earnings beats, but smaller beats than you may have come to expect.
NASDAQ: MU
Key Data Points
What it means for Micron stock
More of Micron's revenue is coming from supply agreements with locked-in pricing these days. That makes the numbers still big -- but more predictable, and less likely to surprise to the upside.
Still, the AI revolution is in full swing and "the durability of this memory upcycle continues to be under-appreciated," says the analyst. DRAM and HBM markets remain undersupplied, and Chin thinks it's not unreasonable to expect 15% to 20% growth in chip volume through 2027, with profit margins continuing to trend higher besides.
Given all this, Micron stock at less than 23x earnings, and anticipating triple-digit earnings growth over the next five years, still looks like a buy to me.
