Brean Capital Raises Price Target on Micron Technology (MU) Following 1Q Earnings Report
Brean Capital reiterated a Buy rating on Micron Technology (NASDAQ: MU), and raised the price target to $28.00 (from $25.00), following the company's 1Q earnings report. MU reported Nov-16Q revenue of $3.97B, which was above the mid-point of its pre-announced revenue of $3.94B and ahead of Consensus of $3.80B. OPEX for the Nov-16Q increased by about 10% Q/Q and this resulted in non-GAAP EPS of $0.32 vs. Consensus of $0.28.
Analyst Mike Burton commented, "Micron reported a beat and raise last night after market close for the Nov-16Q results and Feb-17Q guidance. Similar to the last two quarters, expectations headed into the quarter were high, however, unlike the last two quarters whereby Micron only delivered strong top-line results, the Nov-16Q results demonstrated how Micron can deliver on both the top and bottom line as the company’s strong leverage in the quarter resulted in EPS that beat the Street by $0.04 (this is after having positively pre-announced this Q). For the Feb-17Q outlook, the company guided both revenue and EPS well above the Street. We continue to like MU since it is in the midst of a positive cycle in the DRAM and NAND markets. We believe Industry-wide cuts to DRAM CAPEX in 2016 will deliver a favorable supply demand balance through at least the 1H17 and that its improved position in non-volatile memories (3D NAND and XPoint) will help contribute to its earnings power going forward. We believe that MU’s cost cutting internal priorities are still on track and that the supply/demand picture in its end markets look favorable through the 1H of 2017, thus we are maintaining our Buy rating on MU, and increasing our target price to $28 with our rising earnings estimates."
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Shares of Micron Technology closed at $20.58 yesterday.