Citi analyst Atif Malik lowered his price target on Micron (MU) by about 18% to $1,150 from $1,400 while maintaining a Buy rating. Following meetings with memory suppliers and industry experts, Malik said pricing for both DRAM and NAND remains strong. However, he warned that the upcycle is likely to slow next year.
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Why Citi Cut Its Price Target on MU Stock
Malik expects both DRAM and NAND prices to continue rising over the coming quarters, but at a slower pace. “We see both DRAM and NAND prices decelerating Q/Q in the next four quarters, with prices peaking in 2Q of next year,” he wrote.
Because memory stocks tend to trade in line with pricing expectations, Citi lowered its fiscal 2027 and 2028 earnings estimates by 1% and 2%, respectively. The firm also reduced the valuation multiple it uses for Micron, leading to the lower price target.
Citi now expects Micron’s gross margin to decline from the mid-80% range to the mid-70% range next year as memory prices ease. Even so, Malik noted that about 40% of Micron’s DRAM bits are covered by long-term pricing agreements, which should help cushion the impact of weaker pricing.
Citi also pointed to mixed trends across the memory industry. Samsung (SSNLF) reported stronger-than-expected memory pricing, while SK Hynix (SKHY) posted solid results and announced a five-year supply agreement with Nvidia (NVDA). In contrast, SanDisk (SNDK) issued weaker revenue guidance, supporting Citi’s view that the memory cycle is beginning to cool.
China Remains the Biggest Long-Term Risk
Beyond the near-term outlook, Citi believes China remains the biggest long-term risk for Micron. “China competition and capacity additions in both NAND and DRAM markets is the biggest risk to our thesis,” Malik wrote.
The firm noted that Chinese memory makers continue expanding production. While U.S. export restrictions are unlikely to allow Chinese-made memory into the U.S. market, Citi warned that higher shipments to Europe and other regions could still pressure Micron’s pricing.
Is MU Stock a Buy, Sell, or Hold?
Currently, Wall Street has a Strong Buy consensus rating on Micron stock based on 29 Buys and one Hold. The average MU stock price target of $1,560.74 indicates 77% upside potential.
