Micron (NASDAQ: MU) stock price has been extending the upside momentum amid the trader’s confidence in improving future fundamentals. Market analysts are also presenting a bright outlook for the chipmakers. The majority of analysts have provided higher price targets following robust first-quarter results.
The company’s strategy of increasing capital investments in growth opportunities is among the indicator of solid demand in the analyst’s view. It recently announced capital investments of more than $7bn for fiscal 2021. “It’s likely to be higher than this year based on our growth expectations for demand and what we think we’ll need in terms of supply, and we’ll give more color down the road,” Zinsner, speaking at the Goldman Sachs Tech & Internet conference.
Strong Product Demand Could Drive Micron Stock Price Higher
Raymond James raised Micron’s stock price target to $70 with buy ratings. Its Analyst Chris Caso said, “Supply/demand conditions are highly likely to improve further as the year progresses and that inventory levels are approaching normalized levels. A number of growth catalysts ahead that could drive significantly improved demand” in H2.”
Cleveland Research lifted the MU share price target to $67 with a Buy rating. The firm believes both pricing and demand look strong which provides support to financial numbers.
First Quarter Beat and Strong Revenue Outlook Is Enhancing Sentiments
Micron topped first-quarter revenue estimate by $100ml while earnings grew $0.01 per share compared to the consensus estimate. The first-quarter revenue of $5.14 billion increased significantly from $4.87 billion in the previous quarter. The company generated earnings per share of $0.48; the free cash flows stood around $2bn. The free cash flows are permitting it to repurchase common outstanding stock. It bought $50ml of stock during the first quarter. Analysts always give importance to share buybacks because they enhance share price and earnings per share.
The company claims that an improved competitive position, structurally higher profitability, dramatically stronger product portfolio and investment-grade balance sheet will allow them to create value for investors.