Micron Technology (MU) — Last year, I first recommended this stock in the Trade of the Day on March 25, near $10 with a target of $14. Then, on June 7, with the stock at $12.56, I increased my target to $16-plus, citing better prices for DRAM and NAND flash products, Micron’s core business.
I upped my target again to $20 on June 27 following better-than-expected fiscal third-quarter earnings, strong guidance, and analysts increasing their earnings and price estimates. When the company beat fiscal fourth-quarter estimates, I hiked my price target to $24 on Nov. 14.
On Wednesday, Micron’s fiscal Q1 earnings report again smashed estimates when the company reported a 69% sequential increase in revenue from its DRAM products and EPS of $0.77 versus an estimated $0.43.
Following the report, MU broke from a channel consolidation with a powerful breakaway gap that should attract new buyers. Analysts are scrambling to increase their full-year earnings estimates, and it is clear that the stock is under heavy accumulation.
MACD is on the verge of triggering a new buy signal, so I’m increasing my price target again to $30. However, since this stock could become more volatile, new buyers should only take a half position now and add to it if the newly opened gap is partially closed.