Micron Technology Inc. (NASDAQ: MU) was set up as an earnings report that was priced for perfection. It might not have been perfect, but the results were good enough that investors and analysts have decided to keep endorsing the independent leader of DRAM.

The question to ask is whether or not the run up and valuation is just getting to be too much? The answer will almost certainly depend upon who is asked.

It turns out that even the cautious investors and analysts have capitulated with price hikes on the stock target – yet again. We took a look at the analyst calls and the line is full of price hikes galore.

Earnings had a bit of both sides of the story for bulls and bears alike. Micron posted $0.79 in earnings per share on revenue of $3.98 billion, versus estimates $0.70 per share on $3.89 billion in revenue. Here was the problem we identified which was acting as a drag on Tuesday morning, but which has now turned into gains:

“On a sequential basis, revenue slipped 3%. Adjusted earnings of $913 million equaled a sequential decline of almost 7.7% from $989 million ($0.85 per share). A year-over-year comparison does not include revenues and earnings from Elpida Memory, which Micron acquired out of bankruptcy last year. That deal did not close until the third quarter, so the only reasonable comparison for analysts and investors to make was against the company’s second quarter. That makes the comparison look bad.”

Then there are the massive price target upgrades and formal ratings upgrades seen. Very few negative calls were made, and the price target will be even higher by the time next week rolls around. Here are some of the analyst calls seen on Tuesday:

• Needham & Co. decided to raise the rating from an already positive Buy up to the highest of all – Strong Buy! It also raised its target to $50 from $40.
• Jefferies maintained its Buy rating but raised its target up to $38 from $32.
• Merrill Lynch maintained its Buy rating and raised the target price to $43 from $40.
• Credit Suisse reiterated its Outperform and $50 price target.
• Topeka Capital Markets has only a Hold rating, but that target was raised to $33 from $27.
• JPMorgan also has only a Neutral rating, but it raised its price target to $36 from $24.

Credit Suisse is one of the most positive firms  in the above calls. The firm’s research note said,

“We continue to argue greater than $5 of sustained EPS especially has our non-consensus view on enterprise DRAM demand begins to gain traction. Applying a 10x P/E to our sustained EPS estimate supports our $50 Price Target.”

After a stock rises over 300% in less than 18 months, Micron’s valuation is still just not that high. Even after a gain of over 4% to $32.65, this only valued Micron at 10-times a blended estimates of August fiscal year earnings per share targets in 2014 and 2015. And compared to the highest earnings estimate, Micron trades at less than 6-times the most optimistic earnings per share target for 2015. Of course, investors did have to stomach years of problems ahead of the last secular gain for the company.

At $32.65, Micron’s 52-week trading range is $12.31 to $32.97. The consensus price target is closer to $36, but again – that will rise by next week as price target adjustments get factored into the mix.

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