Micron keeps analysts bullish as memory demand strengthens

Bank of America (BofA) and UBS retained their 'buy' ratings on Micron Technology Inc (NASDAQ:MU) , with both firms pointing to sustained memory demand, improving pricing and potential shareholder returns as key drivers for the semiconductor company. BofA said the key issue ahead of Micron’s fiscal fourth-quarter results was whether gross margins could remain around the mid-80% range through fiscal 2027. The broker said durable margins could support consensus fiscal 2027 earnings of $150 to $200 a share, while Micron’s valuation remained around seven times forward earnings, below its historically sustained level of about 10 times. BofA also highlighted the potential resumption of share buybacks from 9 December after restrictions linked to Chips Act grants expire, estimating that trailing free cash flow could support the retirement of 8% to 10% of shares. The firm expects Micron’s fiscal 2027 capital spending to reach the mid-to-high $40 billion range, although more than half of the year-on-year increase is expected to fund longer-cycle cleanroom construction rather than immediate capacity additions. UBS retained its 'buy' rating and $1,625 price target, saying its latest checks showed the gap between memory supply and demand continuing to widen into calendar 2027. UBS expects DRAM fulfillment to remain around 60%, while server DDR bit demand could grow about 80% year on year and server and storage SSD bit demand could rise more than 100% in calendar 2027. The broker expects Micron to report fiscal fourth-quarter revenue of about $52 billion and gross margin of roughly 87.6%, while forecasting revenue of $58 billion to $59 billion for the following quarter. UBS also expects share re...