HomeMost PopularTech StocksIs It Worth Investing in Micron (MU) Based on Wall Street's Bullish...

Is It Worth Investing in Micron (MU) Based on Wall Street’s Bullish Views?

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Before making investment decisions, many investors rely on recommendations made by Wall Street analysts. But do these recommendations really matter? Let’s take a closer look at what these analysts have to say about Micron (MU) and how reliable their opinions are.

Micron currently has an average brokerage recommendation (ABR) of 1.51, which falls between Strong Buy and Buy on a scale of 1 to 5. Out of the 26 recommendations, 19 are Strong Buy and 2 are Buy, accounting for 73.1% and 7.7% of the total recommendations, respectively.

Brokerage Recommendation Trends for MU

Broker Rating Breakdown Chart for MU

Check price target & stock forecast for Micron here >>>

While the ABR suggests buying Micron, research shows that brokerage recommendations have limited success in predicting a stock’s price appreciation. Analysts have a tendency to rate stocks with a strong positive bias due to their vested interest in the stocks they cover. In fact, for every β€œStrong Sell” recommendation, there are five β€œStrong Buy” recommendations.

So, how can you make an informed investment decision? One reliable tool is the Zacks Rank, which classifies stocks from Strong Buy (#1) to Strong Sell (#5) based on earnings estimate revisions. By validating the ABR with the Zacks Rank, you can increase your chances of making a profitable investment.

ABR Should Not Be Confused With Zacks Rank

Although both ABR and Zacks Rank are displayed on a scale of 1-5, they are different measures. The ABR is based solely on brokerage recommendations, while the Zacks Rank considers earnings estimate revisions. The Zacks Rank has shown a strong correlation with near-term stock price movements based on empirical research.

Furthermore, the Zacks Rank is constantly updated to reflect the changing business trends of the companies analyzed. On the other hand, the ABR may not always be up-to-date. The Zacks Rank maintains a balance among its five ranks for all stocks, while the ABR can vary based on individual analyst opinions.

Is Micron a Good Investment?

Considering the earnings estimate revisions for Micron, the Zacks Consensus Estimate for the current year remains unchanged at -$4.56 over the past month. This steady view from analysts suggests that the stock may perform in line with the broader market in the near term. With a Zacks Rank #3 (Hold), it is advisable to approach the Buy-equivalent ABR for Micron with caution.

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Zacks Investment Research

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

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