Analysts Keep Hiking Micron's Revenue And Price Forecasts - Shorting MU Puts Works Here

Analysts have been continuously hiking their revenue forecasts and price targets for Micron Technology (MU). MU stock is off its recent highs, so shorting out-of-the-money (OTM) MU puts in nearby expiry periods is attractive to value investors. This article will show how that works.

MU closed at $949.83 on Thursday, Aug. 13, up +4.23%. It is still well below a recent peak of $1,213.56 on June 25, right after its June 24 fiscal Q3 earnings release. However, it has recovered nicely from a market close low of $739.00 on July 29.

MU stock - last 3 months - Barchart - Aug. 13

MU stock could have much more upside. I discussed this in two Barchart articles, including this on June 26 and more recently on July 7, 2026.

What MU Stock is Worth

I showed that MU stock could be worth $2,304 per share based on a 45% FCF margin and a 4% FCF yield metric, and even higher at $2,593 with a 50% FCF margin. That provides 143% to 173% potential upside to investors if MU stock hits these price targets.

However, since then analysts have raised their revenue forecasts, so these price targets are even more relevant to investors today. For example, Seeking Alpha shows that the average revenue forecast for the year ending Aug. 2027 is $239.84 billion. That's up from $235.24 billion (as seen in my July 7 Barchart article) and $225.71 billion (in the June 26 Barchart article).

So, using a 45% FCF margin, it's likely that Micron will now generate $107.9 billion in FCF. That's up from $105.4 billion in my last article.

Moreover, just to be conservative, let's apply a 5.0% FCF yield (i.e., a lower metric vs. my prior 4.0% yield metric).

  $107.9 / 0.05 = $2,158 billion fair market value

That's still +101% higher than its present market cap of $1,073 billion, according to Yahoo! Finance.

In other words, the price target for MU stock is:

  $949.83 x 2.01 = $1,909.16 price target (PT)

Moreover, analysts have raised their price targets recently. Yahoo! Finance shows that its survey of 46 analysts has an average PT of $1,501.98. That is up from $1,486 a month ago (July 7), and represents upside of over 58% from Thursday's closing price.

The bottom line is that MU stock still looks undervalued here. 

Shorting MU Puts Works

One way to play it, in case MU trades in a range, is to sell short out-of-the-money (OTM) puts. That way an investor can earn extra income while waiting to potentially buy in at a lower price.

This is what worked out in my last Barchart article on July 7. I showed that shorting the $935.00 MU put expiring July 20 would give an investor a breakeven buy-in of $880.55. That was 10.6% lower than the price at the time.

As it turned out, on July 20, MU closed at $865.46, having hit $848.45 the day before. So, an investor would have had their account assigned to buy shares at $935.00. But the all-in cost, after the income received, was $880.55.

That resulted in a small unrealized loss, for a short time. However, today, that investor now has a positive return:

$949.83 / $880.55 breakeven cost -1 = +7.87% unrealized gain

Moreover, this is better than a buy-and-hold investor in MU stock. On July 7, MU was at $938.38. So, holding MU would have return just $11.45, or +1.22%. That's lower than the unrealized 7.87% gain a short-put investor would have made

New Short-Put MU Play

So, now an investor could sell covered calls, and/or short more out-of-the-money puts.

For example, the Sept. 11 expiry $900.00 put contract, which is 5.25% below the trading price (as in the last article), has a midpoint premium of $43.78.

MYU puts expiring Sept. 11 - Barchart - As of Thursday, Aug. 13, 2026

That gives a short-seller a one month short-put yield of 4.864% (i.e., $43.78/$900.00) and a breakeven buy-in price of $856.22 (i.e., $900.00 - $43.78).

In other words, this is an excellent way for the investor to potentially lower their average cost with a new investment at $856.22 (from $880.55 in the play above), as well as pick up extra income.

In fact, even if MU stays flat, the investor's average cost will have dropped from $880.55 to $836.77 (i.e., $880.55 - $43.78). That means their unrealized gains will now be:

  $949.83 / $836.77 - 1 = +13.5%

That shows why value investors love shorting out-of-the-money puts in stocks like MU that have good potential upside.