Earnings Estimates Rising for Micron (MU): Will It Gain?
The upward trend in estimate revisions for this chipmaker reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Micron, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
The company is expected to earn $2.51 per share for the current quarter, which represents a year-over-year change of +112.71%.
Over the last 30 days, the Zacks Consensus Estimate for Micron has increased 23.45% because six estimates have moved higher compared to no negative revisions.
For the full year, the company is expected to earn $7.77 per share, representing a year-over-year change of +497.69%.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, eight estimates have moved up for Micron versus no negative revisions. This has pushed the consensus estimate 11.22% higher.
The promising estimate revisions have helped Micron earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Investors have been betting on Micron because of its solid estimate revisions, as evident from the stock's 25.5% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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