Micron Technology (MU: NSD), the leading US memory chip manufacturer, is going to release its earnings report soon. As the memory market is starting to show signs of recovery, all eyes are on Micron’s upcoming report to assess the strength of the rebound and its trajectory for the future.
Deutsche Bank Analyst Forecasts and Market Outlook:
Deutsche Bank analyst Sidney Ho has a cautiously optimistic outlook for Micron. Based on the company’s revised guidance last month, Ho is anticipating continued improvement in both bit shipments and pricing dynamics in the company’s fiscal second quarter, which ends in February 2024. Although he models revenue slightly below consensus at $4.85 billion, he expects a narrower loss per share of -$0.48 compared to the -$0.64 consensus.
Ho believes that Micron’s gross margins will continue to improve, which is the reason for his improved bottom-line projection. In November, Micron raised its revenue and margin estimates for the fiscal first quarter, citing better-than-expected supply-demand conditions and stabilizing prices, which is expected to carry over into the second quarter as well.
Stock Target Advisor’s Analysis:
Stock Target Advisor gives a sell rating to Micron, with a target price set at $80.71. With a projected price change of a mere -0.86%, it appears that the company’s stock may not be the best choice for investors seeking high short-term yields. This brings us to the question: Based on the premises of Stock Target Advisor’s analysis, is Micron as ripe for selling as indicated?
Analyzing Micron’s Financial Performance:
Micron’s financial metrics also tell an intriguing story. Over the past year, Micron encountered a capital loss of -21.83%, positioning it at the 30.77 percentile rank within its sector. Additionally, the company experienced a dramatic 5-year revenue contraction of -48.87%, placing it at a lowly 3.92 percentile rank in its cluster.
Analyst Coverage and Sector Analysis:
Despite these concerns, a total of 21 analysts maintain a Strong Buy rating for Micron, with an average target price of $80.16, slightly below Stock Target Advisor’s target. The sector, however, holds a neutral rating with an average 1-month return of 10.83%. Top analysts from Deutsche Bank, Needham & Company, and Morgan Stanley & Co. also cover Micron.
Conclusion:
Micron Technology’s upcoming earnings report is highly anticipated as the memory market shows signs of recovery. Deutsche Bank analyst Sidney Ho has a cautiously optimistic outlook, expecting improvement in bit shipments and pricing dynamics. While Micron’s financial metrics raise some concerns, the sector holds a neutral rating with positive returns in the past month. Therefore, investors should carefully consider the various analyst opinions and sector analysis before deciding on Micron’s (MU: NSD) stock.
