What to Watch When Micron Reports After the Close
Micron is set to release its most recent financial results after the markets close on Thursday, and Wall Street expectations are low.
Micron Technology Inc. (NASDAQ: MU | MU Price Prediction) is set to release its most recent financial results after the markets close on Thursday. The consensus estimates are calling for $0.49 in earnings per share (EPS) and $4.57 billion in revenue. The fiscal first quarter of last year reportedly had $3.53 in EPS and $8.44 billion in revenue.
In a recent report from Wedbush, the firm said that it believes Micron will exceed consensus EPS and revenue estimates for the August quarter being reported, given better pricing conditions versus expectations exiting June.
However, Wedbush also feels this result is widely understood. Looking forward, the firm is optimistic around likely the second half of fiscal 2020 fundamentals (strong product cycle demand and constrained supply adds). Although, the firm is unwilling to get more constructive ahead of softer seasonal demand in the calendar fourth quarter/calendar first quarter and the likelihood this seasonality weighs on memory pricing, particularly now that any slowdown in builds (servers/PCs) could be exacerbated by the apparent return of Intel CPU shortages.
Wedbush reiterated a Neutral rating with a $30 price target, implying downside of 39% from the prior closing price of $49.47. The firm went on to say that Micron has a strong 2020 outlook:
Looking beyond Micron’s likely commentary/guidance, we believe that CY2H’20 fundamentals will almost certainly prove to be extremely positive for memory in light of numerous product cycles. We do expect Micron to forecast lower capex growth (Y/Y), a result that fits with our view that 2020 capacity adds (DRAM and NAND) will trail prior years, creating increased likelihood of shortages if our bullish demand thesis plays out.
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Excluding Thursday’s move, Micron had outperformed the broad markets, with its stock up about 56% year to date. In the past 52 weeks, the stock was up only 9.5%.
A few other analysts have weighed in on Micron ahead of the results:
- Cowen has a Market Perform rating with a $46 price target.
- BMO Capital Markets rates it as Outperform with a $60 target.
- JPMorgan has an Overweight rating with a $65 price target.
- Cleveland Research has a Hold rating.
- Goldman Sachs has a Buy rating with a $59 price target.
- Cascend Securities has a Buy rating with a $65 price target.
- Wells Fargo has an Outperform rating and a $60 price target.
Shares of Micron traded down about 1% to $49.06 on Wednesday, in a 52-week range of $28.39 to $51.39. The consensus price target is $51.31.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
