Micron Technology’s (MU) fiscal Q1 results indicate some improvement from the company’s recent underperformance, Morgan Stanley said in a note on Thursday.
“This quarter makes us feel better about some of the Micron-specific earnings underperformance of late, though it does not
convince us that we are back at peak earnings in CY25,” the investment firm said.
The note said that “low realized price increases in November (up low single digits) do leave more room for pent-up price increases in May.”
But there may also be “supply demand challenges for 2024, as DRAM shipments in 2h23 were not strong enough to give us conviction on next year,” the investment firm said.
Morgan Stanley raised its price target on Micron to $74.75 from $71.50 while keeping its underweight rating.
“Our through-cycle earnings expectations have not changed, and reflect a premium to trailing 5 years earnings, but we are raising the multiple given that investors are clearly willing to pay higher prices for the stock,” the note said.