Micron stock price target maintained at $140 by BofA despite raised outlook

Micron Technology (MU) significantly raised its fiscal fourth-quarter guidance, with revenue now projected at $11.2 billion and EPS at $2.85, exceeding consensus due to broad-based strength in DRAM and NAND average selling prices and robust demand, particularly in HBM. While several analysts, including Mizuho and Rosenblatt, responded by reiterating positive ratings and raising price targets, BofA Securities maintained its Neutral stance and $140 price target, citing limited long-term visibility beyond data center and AI markets, alongside valuation and geopolitical concerns. This reflects strong near-term memory market fundamentals but highlights analyst divergence on extended outlooks.

Analysis

Micron Technology (MU) has issued a significantly positive fiscal fourth-quarter guidance revision, forecasting revenue of $11.2 billion and EPS of $2.85, surpassing consensus estimates. This upgrade is driven by broad-based strength in average selling prices (ASPs) for both DRAM and NAND, coupled with robust demand across all end markets, particularly for high-margin HBM where management expresses confidence in selling out supply through calendar year 2026. The company's financial health appears solid, with a gross profit margin of 37.13% and a healthy current ratio of 2.75x, reinforcing the positive operational momentum that has contributed to a 47% year-to-date stock gain. While most analyst firms like Mizuho and Rosenblatt responded with bullish reiterations and increased price targets, BofA Securities maintained its Neutral rating and $140 price target. BofA's caution is rooted in specific concerns: limited visibility into unit demand and pricing for calendar years 2026-2027 outside of the data center and AI segments, increased geopolitical and tariff risks, and a valuation premium. Micron currently trades at a 0.7x premium to competitor SK Hynix, notably above its historical average of 0.4x, a factor that prompted BofA to slightly lower its price-to-book multiple in its valuation.

Key Decisions for Investors

• Investors with a near-term focus may find the upgraded guidance, strong ASP trends in memory, and bullish consensus from multiple analysts to be supportive of continued positive momentum.
• Long-term and value-oriented investors should weigh the stock's current valuation, which trades at a premium to its historical average against peers, and consider the limited visibility into non-AI market demand for 2026-2027.
• It is critical to monitor future management commentary for signs of demand strength or weakness outside the data center and AI sectors, as well as any developments related to tariffs, as these are the key risks tempering the current outlook.