Wall Street calls Micron earnings an 'early Christmas present,' Goldman sees 20% upside

Published Thu, Dec 21 20237:40 AM ESTUpdated Thu, Dec 21 20237:50 AM EST

Santa came a little early for Micron Technology and its shareholders, according to some Wall Street analysts. The memory chipmaker posted quarterly results after the bell Wednesday that topped expectations, and guided above consensus for the current quarter as demand recovers. Shares jumped 6% before the bell. MU 1D mountain Micron shares pop 6% after earnings "We believe the memory market is at an inflection point heading into CY24, and expect MU to return positive EPS in FQ3/Q4," said Bank of America's Vivek Arya. "Though 2HFY24 growth largely more dependent on sustained pricing rebound ... the blend of key smartphone/PC cyclical markets rebounding combined with the multi-year secular tailwinds of AI ... create increased confidence." Citi analyst Christopher Danely referred to the print as an "early Christmas present" and reiterated his buy rating. He cited the company's above consensus guidance and signs of normalization in DRAM inventories and more end markets, along with rising gross margins. Goldman Sachs analyst Toshiya Hari lifted his price target to $97, representing about 23% upside. Micron's outlook depicts an improving supply and demand dynamic, the analyst wrote, adding that its increased presence in the high bandwidth memory market should lift revenues, margins and earnings into 2024. "We believe the stock should continue to outperform through 2024 as the market continues to discount improving revenue/margin/earnings power into CY25," said JPMorgan's Harlan Sur, adding that Micron's HBM3e memory chip product should serve as a "meaningful 2024 revenue driver." But not everyone on Wall Street is viewing Micron's print with the same holiday cheer. While low realized price increases may improve visibility for the company into May, Morgan Stanley's Joseph Moore retained his underweight rating on shares, viewing better opportunities in overweight-rate Western Digital . "This quarter makes us feel better about some of the Micron-specific earnings underperformance of late, though it does not convince us that we are back at peak earnings in CY25," he wrote. — CNBC's Michael Bloom contributed reporting