Micron (NASDAQ:MU) news for Tuesday concerning a new rating from analysts at Cowen.
The positive Micron news has Cowen upgrading the stock to a new “Outperform” rating. That’s great for MU stock considering the previous rating from Cowen had the company stuck with a “Market Perform” rating.
The Micron news doesn’t just stop with an upgrade, though. It also includes a new price target for MU stock. This has Cowen increasing its price target from the previous $50 to the new $70, reports Seeking Alpha.
The new price target for MU stock is a 40% increase over the old price target. It also suggests there’s plenty of room for improvement in the stock. The previous closing price was $53.56, which has this new price target 30.70% above that.
So why exactly is Cowen taking such a bullish stance on MU stock? The beneficial Micron news has to do with its expectations for DRAM, a type of computer memory. The analysts at Cowen are expecting the market to improve faster than was previously expected.
Cowen analysts say there’s a major reason to expect an increase in the DRAM market. This is tied to the introduction of 5G wireless. With this new wireless connection will come new smartphones that can make use of it. As 5G grows, more customers will want to switch to these new smartphones, which may require more DRAM to operate, Barron’s notes.
MU stock was up 8.33% as of Tuesday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.