Micron Stock Climbing Alongside Chip Sector

Micron's competitor, Advanced Micro Devices, was upgraded by Piper Sandler

May 17, 2022 at 11:38 AM
facebook twitter linkedin


Micron Technology, Inc. (NASDAQ: MU) is getting a halo lift this afternoon on the back of a rally for the semiconductor sector. Piper Sandler just recommended buying the dip on sector peer Advanced Micro Devices (AMD), which in turn has sent MU up 3.6% to trade at $73.02 at last check.

The stock looks to be staging a bounce off its $66 level, which has served as a floor on the charts since MU's break above here in late 2020. However, MU will have to contend with recent pressure at the $74 mark and 50-day moving average if it wants to maintain this rally and chip away at its 22% year-to-date deficit.

mu may 17

Analysts remain bullish on MU. Of the 16 in coverage, only two call it a "hold," compared to 14 "strong buy" ratings. What's more, the 12-month consensus price target of $110.42 is a 51.2% premium to current levels. 

Moreover, the semiconductor stock's fundamentals provide a great deal for investors to be excited about despite Micron stock’s bearish form. Although MU previously saw consecutive years of top- and bottom-line declines between fiscal 2018 and fiscal 2020, signs point towards a successful recovery for the business. Since fiscal 2020, Micron has increased its annual revenues and net income. In addition, MU is estimated to grow revenues by 21.5% and earnings by 57.8% for fiscal 2022. The semiconductor name is also estimated to increase revenues by 20.2% and earnings by 31.1% for fiscal 2023, signaling high growth rate expectations.

MU currently holds a solid balance sheet with $10.12 billion in cash and $7.67 billion in total debt, adding a layer of security for the business. Micron stock also offers an intriguing valuation, trading at an attractive forward price-earnings ratio of 5.77 and a price sales ratio of 2.47, suggesting that MU is undervalued at the moment.

 
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners