The analyst firm said its higher price target for the chipmaker is based on10x its 2016 EPS estimates of $4.08 a share for the company. Analyst Monika Garg said that "rising manufacturing challenges are leading to limited bit growth and balanced supply/demand for DRAM and NAND, which benefits" Micron.
"We believe limited bit growth mean earnings should move higher for the memory vendors, which could justify multiple expansion," Garg wrote. The analyst added that "If Micron can consistently generate higher FCF, a higher multiple and target could be justified."
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Separately, TheStreet Ratings team rates MICRON TECHNOLOGY INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICRON TECHNOLOGY INC (MU) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."