Shares of Micron Technology Inc. declined Thursday after analysts acknowledged that the memory-chip maker is on the road to recovery but debated how long that would take.
Late Wednesday, Micron’s MU,
Piper Sandler analyst Harsh Kumar upgraded Micron’s stock to neutral from underweight and raised his price target to $70 from $45 because of “improving end-market inventory conditions with a potential improvement in volumes and pricing” in the second half of the year. Micron has already spent $1.6 billion in inventory write-downs this year.
“We firmly believe that the stock has already bottomed, and in short order of six months or so we expect tailwinds to be behind Micron,” Kumar said, noting that he expects normalization of Micron’s data-center inventory by the end of the year and shipments of newer products to cross over earlier models by the end of the first quarter of 2024.
Morgan Stanley analyst Joseph Moore was less optimistic, with an underweight rating and a $46 price target. Moore said that while Micron’s top line isn’t getting worse and inventory is getting written down, the company still faces challenges.
Moore said the bull case for Micron has fallen short, and while the company has talked up AI servers needing more memory, it “lacks AI products to benefit from the one strong end market.” The current price of the stock “leaves very little room for upside, and we remain convinced that oversupply will persist through most of next year, which was consistent with management detailed comments,” he said.
All told, 15 analysts hiked price targets, resulting in an average target of $76.22, up from a previous $70.47, according to FactSet data. Of the 38 analysts who cover Micron, 24 have buy-grade ratings, 12 have holds and two have sell ratings.