Micron (NASDAQ: MU) received an upgrade on Wednesday, April 8, when UBS reiterated a “Buy” rating on MU shares and increased its price target from $510 to $535.
The positive change came despite the sentiment around the memory sector turning negative, as the firm argued, adding that its latest industry checks still point to continued pricing strength.
Overall, the bank maintained that the market is now experiencing a super-cycle that could “defy traditional analytical norms for the stock. What’s more, it noted that there is growing evidence of memory producers sacrificing some near-term upside in favor of longer-term visibility.
According to this view, more stable earnings, positive margins, and return on equity could be on the menu further in the cycle.
At press time, Micron stock was rallying 9% in pre-market trading, where it sat at $411.
Micron’s pricing momentum continues to build, UBS says
In the analyst note, UBS emphasized that pricing momentum continues to build not only in DRAM but also in NAND, with particularly strong trends in high-bandwidth memory (HBM).
The bank also highlighted ongoing negotiations with hyperscalers and original equipment manufacturers, expecting customers to lock in long-term supply agreements as a result.
Indeed, the most important negotiations reportedly include volume commitments, upfront payments, and structured pricing bands, while high-profile names are said to be pushing for longer-duration HBM contracts.
As a result, UBS projects Micron’s earnings per share to reach roughly $135 in 2027, well above the Street consensus of $103, and about $120 in 2028, versus estimates of $98. Similarly, it sees Micron’s tangible book value at around $180 per share within a year, alongside a cash position exceeding $100 billion.
Is Micron stock a buy?
With UBS’s new forecast, the average Micron stock price target for the next year has climbed to $543.13. Based on the data Finbold retrieved from the Wall Street tracking platform TipRanks, the figure suggests an upside of more than 43%.
Wall Street’s consensus on the stock is “Strong Buy,” with no “Sell” and only three “Hold” recommendations over the past three months, as opposed to twenty-five “Buys.”
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