Why Shares Of Micron Are Up By 5% Today?

Micron Video 01.04.21.

Micron Stock Gains Ground After Strong Quarterly Report

Shares of Micron gained strong upside momentum and moved closer to all-time high levels after the company provided its quarterly report.

Micron reported revenue of $6.24 billion and adjusted earnings of $0.98 per share, beating analyst estimates on both earnings and revenue. The company’s operating cash flow totaled $3.06 billion compared to $1.97 billion in the previous quarter.

In the next quarter, Micron expects to report revenue of $7.1 billion and adjusted earnings of $1.62 per share. The company’s guidance looks strong which is not surprising given the current market situation in the semiconductors segment. The world is suffering from a shortage of chips, which is a bullish development for Micron.

What’s Next For Micron?

The market situation remains favorable for Micron and other companies in the semiconductor space. Coronavirus pandemic has boosted demand for chips, while the increased demand from the auto industry supported the upside trend.

The market remains tight, and it remains to be seen whether producers will be able to ramp up supply significantly in the near term. Meanwhile, Micron will benefit from both strong demand and higher prices for its production.

Analyst estimates for Micron earnings have increased significantly in the recent months. Currently, analysts expect that the company will report earnings of $4.85 per share for the financial year 2021. For the financial year 2022, Micron is projected to report earnings of $9.41 per share so the stock is trading at less than 10 forward P/E which is cheap by modern market standards.

In this light, Micron shares have a good opportunity to develop additional upside momentum in the upcoming weeks. If Treasury yields continue their current pullback and more further away from recent highs, tech stocks will get more support, and Micron stock will have a chance to test all-time high levels at $97.50 which were reached back in 2000.

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