Micron falls after double downgrade and price target cut

Micron technology (NASDAQ: MU) 5% slipped during early market trading on Thursday after it received a double downgrade and a price target cut from analysts due to a temporary slowdown in the lower bandwidth memory markets.

This followed on Wednesday Increase of 4.4%.

Raymond James lowered its price The company lowered its target for Micron to $125 from $160, but reiterated its outperform rating on the stock.

Micron's price target was lowered to reflect slower near-term volume growth in the non-high-bandwidth DRAM and NAND markets, but Raymond James views this as a temporary slowdown and expects the DRAM upswing to continue well into the second half of 2025.

“Data center demand remains strong, driven by HBM, while on-device AI is driving strong content growth in smartphones,” Raymond James analyst Srini Pajjuri said in an investor note. “PC/smartphone customers appear to have pre-planned inventory in anticipation of price increases, resulting in more muted seasonality in the second half of 2024.”

Micron appears to remain on track to meet its HBM targets, and Raymond James expects “sustained earnings improvement will continue to provide a tailwind to margins.”

In a more extreme move, BNP Paribas Exane downgraded Micron from outperform to underperform and cut its price target from $140 to $67.

BNP Paribas analyst Karl Ackerman expects Micron's weak performance to continue. Micron hit its year-to-date high of $153 in mid-June, but has largely declined since then.

Nevertheless, many analysts remain optimistic about the stock.

Citi Research views Micron as a “top pick” as the company continues to benefit from strong DRAM prices, which are expected to rise 66% year-on-year in 2024 and 14% in 2025.

Seeking Alpha analysts rate the stock as a “Buy,” while Wall Street analysts rate it as a “Strong Buy.” Seeking Alpha's quant system, which regularly beats the market, rates the stock as a “Buy.”