Will Micron Stock Lead the Recovery With Q2 Earnings?

Chris Lange

Micron Technology Inc. (NASDAQ: MU) is scheduled to release its fiscal second-quarter financial results after the markets close on Wednesday. Although Micron stock has fallen from its highs in February, semiconductors could be the first stocks that recover from this market downturn, and investors will first get some insight into this when Micron reports.

Analysts are calling for $0.37 in earnings per share (EPS) and $4.68 billion in revenue. The same period of last year reportedly had $1.71 in EPS and $5.84 billion.

The company previously issued guidance, but it’s safe to say that this may be subject to change. In December, Micron said that it expected to see EPS of $0.35, give or take $0.06, and revenue in the range of $4.5 billion to $4.8 billion.

As more work moves online to help slow the spread of COVID-19, demand for additional memory, both local and in the cloud, is expected to rise. Higher demand is also projected for servers.

Micron supplies dynamic random-access memory (DRAM) memory chips for servers and NAND flash memory chips for smartphones. These chips have been suffering from supply chain disruptions, but those are expected to resolve themselves by the end of the month.

New servers to meet the demands of cloud services are also expected to be needed. Those devices also require DRAM memory chips.

Excluding Wednesday’s move, Micron stock had outperformed the Dow Jones industrial average and S&P 500 despite a 19.5% retreat year to date. In the past 52 weeks, the share price was actually up about 7%.

Here’s what analysts had to say ahead of the report:

  • KeyCorp has an Overweight rating with a $58 price target.
  • Credit Suisse has a Buy rating with a $90 target price.
  • Wells Fargo’s Overweight rating comes with a $50 price target.
  • Morgan Stanley rates it as Overweight with a $53.50 price target.
  • Robert Baird has a Neutral rating and a $55 price target.

Micron stock traded down about 4% at $41.58 Wednesday morning, in a 52-week range of $31.13 to $61.19. The consensus price target is $65.01.