What to Expect When Micron Reports After the Close

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Micron Technology Inc. (NASDAQ: MU) is scheduled to release its fiscal third-quarter financial results after the markets close on Wednesday. The consensus estimates call for $1.67 in earnings per share (EPS) and $5.82 billion in revenue. The same period of last year reportedly had $2.82 in EPS and $7.35 billion in revenue.

Micron had a rough start to March, even if its shares are still up considerably from the start of the year. While the broader market is making up its mind ahead of the Federal Reserve’s decision Wednesday, there at least some rekindled fears that both DRAM and NAND pricing are running under expectations.

A Susquehanna report released earlier this month still weighed on Micron, and analyst Mehdi Hosseini noted that memory prices were tracking below expectations for the first half of 2019. Another concern is that margins are not expected to meaningfully rebound after inventory accumulation at major suppliers.

Hosseini sees that margin pressure limiting earnings, and that does not seem to be fully reflected yet in consensus expectations nor into the stock.

While one firm’s channel and industry checks may not be the only source of information, wider industry reports are confirming at least some of these concerns. And less than a month ago, KeyBanc Capital Markets projected NAND shortages as a driver for potential upside.

One estimate has DRAM prices down 30% in the first quarter, even worse than the initial forecast of a 25% drop, according to the DRAMeXchange website. They reported it being the softest in about eight years, driven by lower-priced components for PCs and other devices.

Overall, Micron has outperformed the broad markets, with its stock up about 27% year to date. In the past 52-weeks, the stock is actually down 33%.

A few other analysts weighed in on Micron ahead of results:

  • Rosenblatt has a Buy rating and a $75 price target.
  • Standpoint Research has a Buy rating.
  • Mizuho has a Buy rating and a $44 price target.
  • Cross Research has a Hold rating.
  • Bernstein has an Outperform rating.
  • Needham has a Hold rating.
  • BMO has an Outperform rating with a $50 price target.

Shares of Micron were last seen trading at $39.93, in a 52-week range of $28.39 to $64.66. The consensus price target is $46.04.

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