Micron stock is currently up 69% year to date.
On Monday, Micron hit a new 52-week high after being upgraded by a Susquehanna Financial Group analyst. Analyst Mehdi Hosseini raised the stock from neutral to positive, and raised his price target from $45 to $85 per share.
According to Hosseini, Micron stock should take off in the coming years as memory chip prices continue to recover. He believes the company will experience a significant turnaround starting in May 2020, which will set the company up for a strong 2021.
Here is the backstory on Micron, and what we can expect from the company’s upcoming earnings report.
The backstory on Micron stock
Micro makes storage and memory products for consumer PCs, mobile devices, cloud servers, and graphics cards. But the company’s profits have declined over the past year due to a lower market for memory prices.
Micron’s fiscal 2019 year ended in September, and the company’s revenue was down by more than 20% due to lower average selling prices. The company’s profits also fell by 50%.
However, this means Micron is very reasonably priced and could be considered a good long-term buy. Hosseini believes the company’s fundamentals will continue to improve in the coming years as the demand grows for both DRAM and NAND memory chips.
What’s next for Micron?
Micron is scheduled to report its fiscal first quarter earnings this Wednesday, Dec. 18 after market close. Investors will be paying close attention to the company’s gross margins, as this will be a good indicator of how efficient the company’s spending is.
It should be noted that Micron has significantly outperformed the S&P 500 over the past year. And overall, Micron is considered a moderate buy on Wall Street with a potential upside of 7%. Out of the 26 analysts currently reviewing the stock, only two recommend selling.