Micron Technology (MU) reported Fiscal 2021 third-quarter results that showed a strong improvement from a year ago and topped consensus estimates. The semiconductor company also announced a deal to sell its manufacturing site in Lehi, Utah, to Texas Instruments (TXN). Micron stock rose 2.47% on Wednesday to close at $84.98.
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Revenue jumped to $7.4 billion from $5.4 billion a year ago and topped consensus estimates of $7.23 billion. Adjusted EPS of $1.88 beat consensus estimates of $1.71. The results were for the period ended June 3.
“Micron set multiple market and product revenue records in our third quarter and achieved the largest sequential earnings improvement in our history,” said Micron CEO Sanjay Mehrotra.
The company issued fourth-quarter guidance, calling for revenue of $8.2 billion with a possible deviation of $200 million. It expects adjusted EPS of $2.30 with a potential deviation of $0.10.
At the same time as releasing the Q3 results, Micron also said it has reached an agreement to sell its Lehi factory to Texas Instruments. It expects to unlock $1.5 billion in economic value from the sale, and the amount includes a cash payment of $900 million. It hopes to complete the transaction later in the year. (See Micron stock chart on TipRanks).
Prior to Micron’s Q3 report, BMO Capital analyst Ambrish Srivastava upgraded the stock to a Buy from a Hold. Srivastava also raised the stock’s price target to $110 from $90. The analyst’s new price target suggests 29.44% upside potential.
“We believe there is a fair amount of concern related to near-term pricing…While some concerns are valid…We see the DRAM industry [coming] into a supply-demand imbalance into 2022 as well. We see both dynamics on the supply side and on the demand side driving this imbalance,” commented Srivastava.
Consensus among analysts is a Strong Buy based on 14 Buys and 2 Holds. The average Micron price target of $123.62 implies 45.47% upside potential to current levels.
MU scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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