Micron Shares Could Double Over the Next 12 Months, Says 5-Star Analyst

If one leading analyst’s forecast plays out, any investors feeling slightly deflated by Micron’s (MU) underperformance so far in 2020 need not worry.

Ahead of next week’s fiscal 3Q20 earnings report, Rosenblatt analyst Hans Mosesmann is confident in the chipmaker’s ability to execute. What’s more, he expects the next quarterly results to be even better.

The 5-star analyst has a Buy recommendation on Micron shares, to go hand in hand with a lofty $100 price target. This conveys Mosesmann’s belief that Micron will soar by 107% over the next 12 months. (To watch Mosesmann’s track record, click here)

“We continue to like shares of MU as we believe the memory industry will continue its recovery, pricing trends will continue to improve, and the supply of bits will undershoot demand leading to double digit growth in DRAM and NAND,” Mosesmann said.

For the May quarter, Mosesmann anticipates Micron will report revenue of $5.3 billion (up by 10.5% quarter-over-quarter) and non-GAAP EPS of $0.78, matching the company’s pre-earnings announcement.

Better-than-expected pricing and supply/demand trends along with data center demand as well as the WFH environment’s impact on notebooks and gaming are all highlighted as reasons to be positive. On the other hand, expect these to be offset by “weak trends in smartphones, consumer electronics, and automobiles.”

Looking ahead to the August quarter, Mosesmann expects sales to exhibit a mid-single-digit quarter-over-quarter increase. Improving DRAM and NAND trends – and once more – data center, 5G, notebooks, and game consoles, are all set to drive higher sales. Mosesmann also anticipates smartphone demand to stage a recovery.

“In addition, our sense is that ASP’s for DRAM/NAND are on the upswing as stronger segments drive bit demand and near-term weaker segments prepare for a recovery in 2H20,” Mosesmann concluded buoyantly.

Overall, 27 analysts have thrown the hat in with a Micron review over the last three months. Only 1 concluded the chipmaker is a Sell, 8 recommended to Hold while 18 back Mosesmann’s Buy rating. As a result, the consensus rating is a Moderate Buy. The $64.10 average price target, while not quite as bullish as that of the Rosenblatt analyst, still reflects upside potential of 33% in the year ahead. (See Micron stock analysis on TipRanks)

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