Will This Price Target Increase Help Micron Technology (MU) Stock Today?

NEW YORK (TheStreet) -- Pacific Crest raised its price target for Micron Technology (MU) to $41 from $37 on Monday, reiterating its "outperform" rating.

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."

Must Read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

---------------

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."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 48.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, MU's share price has jumped by 75.38%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MICRON TECHNOLOGY INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 45.85% is the gross profit margin for MICRON TECHNOLOGY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.20% is above that of the industry average.
  • You can view the full analysis from the report here: MU Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

Credit Suisse Surges After Strong Q1, Record Wealth Management Inflows

Credit Suisse Surges After Strong Q1, Record Wealth Management Inflows

Global Stocks Slide as Yield Pressure, Commodity Surge Prompts Equity Exit

Global Stocks Slide as Yield Pressure, Commodity Surge Prompts Equity Exit

Asian Markets Decline in Morning Trading

Asian Markets Decline in Morning Trading

Verizon Proves Resilient in Sell-Off; Decoding the Facebook Short -- ICYMI

Verizon Proves Resilient in Sell-Off; Decoding the Facebook Short -- ICYMI

Three Big Factors That Rocked the Stock Market Tuesday

Three Big Factors That Rocked the Stock Market Tuesday