JPMorgan reiterates Micron stock rating ahead of earnings

JPMorgan has maintained its Overweight rating and $1,540.00 price target on Micron Technology (NASDAQ:MU) in anticipation of the company's earnings report scheduled for September 30. The stock has surged 589% over the past year, currently trading at $1,082.28 with a market cap of $1.22 trillion. Analysts believe Micron is currently undervalued, presenting potential upside ahead of the earnings release.

The firm anticipates Micron to surpass consensus estimates for revenue ($51.4 billion), gross margin (86.2%), and earnings per share ($31.73) in the August quarter. JPMorgan notes that pricing momentum remains robust, despite management comments on a moderation in price increases aimed at preserving customer relationships and securing long-term supply agreements.

The company's strong fundamentals, including a 72.6% gross profit margin and 167% revenue growth over the past year, support this approach. Analysts predict continued sales growth and net income growth for the year, with guidance for the November quarter potentially raised based on increased demand signals. Micron has already shipped over $1 billion of HBM4 as of the May quarter, with forward bit production coverage projected at 35%, up from 20% and 33% in DRAM and NAND volumes respectively.