Micron Earnings to Provide More Clues As to Whether Chip Boom Has Passed

MarketWatch2022-06-29

May-ending quarter gives Wall Street an added month of data to pick apartOf the 36 analysts who cover Micron, 32 have buy or overweight ratings, according to FactSet.Micron Technology Inc.'s earnings ...

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Comments

Remotecam
2022-06-29
Remotecam
FEDs put breaks on growth, increase the cost of borrowing, make life more difficult for the poor and middle class, promote unemployment and take money out of the market by QT. And yet analyst and investors expect the chip boom to continue as before.
J4
2022-06-29
J4
Ok
blessed_1
2022-06-29
blessed_1
Buy for mid to long term
YnR V
2022-06-29
YnR V
[Cool]
Penthon
2022-06-29
Penthon
Expected still strong demand on DRAM s[Happy] . Despite igns if global recession...
kencarrot
2022-06-29
kencarrot
Lol

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(NVDA), which had an April-ending quarter. Those earnings revealed the effects of COVID shutdowns in China and lost business because of the war in Ukraine that did not factor for the majority of chip makers that had March-ending quarters.Last quarter, Micron Chief Executive Sanjay Mehrotra said that sales to data-center customers had eclipsed those to the mobile market, and forecast that data-center sales would outpace the broader memory and storage market over the next decade. Revisions to the CEO's forecast on Thursday will be closely watched for signs that demand is starting to ease.The Boise, Idaho-based chip maker specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used in PCs and servers, while NAND chips are the flash memory chips used in smaller devices like smartphones and USB drives.Analysts are just starting to see signs that customers may have overbought chips over the past year given short supplies, which would have in turn contributed to record sales for the industry. The thing is, Wall Street has seen this movie before, when the chip industry rode to record sales in 2018 only to find out it was because customers were double- and triple-buying chips to lock in prices before they could shoot any higher. As a result, chip makers were stuck with huge inventories that took months to unload.For months now, analysts have been fretting over the chip sector following record-high stock prices just before 2022, record sales and sold-out supply until 2023.Headlining that pessimism going into Micron's earnings is Morgan Stanley analyst Joseph Moore, who has an equal-weight rating and recently slashed his price target to $56 from $83.Moore said he is \"incrementally cautious around the end-market outlook,\" and that \"memory markets remain weak from a volume standpoint.\"While Moore appreciates Micron's cost-structure improvements and the product roadmap, \"weakness in PC and smartphone, which was concentrated in China, is growing and spreading both geographically and into server and other markets with order reductions/push-outs popping up recently.\"\"There is also a broader shift of spending from goods to services as COVID-related consumer tendencies transition,\" Moore said.What to expectEarnings: Of the 30 analysts surveyed by FactSet, Micron on average is expected to post adjusted earnings of $2.45 a share, up from the $2.21 a share expected at the beginning of the quarter. Micron had forecast third-quarter net income of $2.36 to $2.56 a share. Estimize, a software platform that uses crowdsourcing from hedge-fund executives, brokerages, buy-side analysts and others, calls for earnings of $2.52 a share.Revenue: Wall Street expects revenue of $8.65 billion from Micron, according to 28 analysts polled by FactSet. That's up from the $8.1 billion forecast at the beginning of the quarter. Micron predicted revenue of $8.5 billion to $8.9 billion. Estimize expects revenue of $8.73 billion.Analysts, on average, expect DRAM sales of $6.15 billion, and NAND sales of $2.29 billion, according to FactSet.Stock movement: Over Micron's May-ending quarter, the stock has fallen 17%, while the PHLX Semiconductor Index  has declined nearly 10% over the same period, the S&P 500 index  has shed 5.5%, and the tech-heavy Nasdaq Composite Index  has dropped 12%.Micron has exceeded analysts' expectations every quarter since December 2018, when sales were about 1% lower than the Street's consensus. Over the 13 quarters since, the stock's movement has been fairly unpredictable, rising seven times the day after earnings, and falling six.What analysts are sayingEvercore ISI analyst C.J. Muse, who has an outperform rating and a $90 price target, said he expects consumer weakness and data-center strength to balance each other out.\"Bigger picture, we believe the structural transformation now underway at Micron, along with an increasingly rational memory-industry backdrop, positions the company well to navigate the current slowdown,\" Muse said.\"For investors with duration, today's level is very interesting, particularly considering the significant strides Micron has made in recent years,\" Muse said. That said, \"given recession potential,\" Muse said he sees $50 as \"the close-your-eyes level\" on the stock.Another analyst who has a $50-a-share downside scenario price on the stock is BMO Capital analyst Ambrish Srivastava, who has an outperform rating and an $85 price target.  Srivastava he expects lower capital spending at Micron as he expects memory-chip prices to go lower than his previous expectations.\"As major end markets, from PCs to handsets, which collectively make up a meaningful portion of the memory industry's revenues, as well as that of Micron's, decelerate more than what we were earlier thinking, we are lowering our estimates for Micron,\"  Srivastava said.UBS analyst Timothy Arcuri, who has a buy rating and a $115 price target, said he thinks that \"investors continue to overlook several key factors\" on the stock.While PC and smartphone weakness is a concern, Arcuri expects strong prices going into 2023 as supply drops off again. Also, \"demand should be cushioned\" by new server platforms upgrading processors next year.\"We believe these company-specific factors have to some degree been lost in the investment debate on the stock as concerns around consumer demand have taken hold,\" Arcuri said.Of the 36 analysts who cover Micron, 32 have buy or overweight ratings, three have hold ratings and one has a sell rating, with an average price target of $96.74, or 67% higher than Tuesday's close, according to FactSet data.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9042299616,"gmtCreate":1656475605335,"gmtModify":1676535837168,"author":{"id":"4093854476996450","authorId":"4093854476996450","name":"Remotecam","avatar":"https://community-static.tradeup.com/news/f856a0a30bd0fa23a086fc678014e48b","vip":1,"crmLevel":6,"crmLevelSwitch":1,"authorIdStr":"4093854476996450","idStr":"4093854476996450"},"htmlText":"FEDs put breaks on growth, increase the cost of borrowing, make life more difficult for the poor and middle class, promote&nbsp;unemployment&nbsp;and take money out of the market by QT.&nbsp;And yet analyst and investors expect the chip boom to continue as before.&nbsp;","listText":"FEDs put breaks on growth, increase the cost of borrowing, make life more difficult for the poor and middle class, promote&nbsp;unemployment&nbsp;and take money out of the market by QT.&nbsp;And yet analyst and investors expect the chip boom to continue as before.&nbsp;","text":"FEDs put breaks on growth, increase the cost of borrowing, make life more difficult for the poor and middle class, promote unemployment and take money out of the market by QT. And yet analyst and investors expect the chip boom to continue as before.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9042299616","repostId":2247357056,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9042671217,"gmtCreate":1656473546839,"gmtModify":1676535836782,"author":{"id":"3582504836067709","authorId":"3582504836067709","name":"J4","avatar":"https://static.itradeup.com/news/150e4b697ccff94ef8d4389a3d49b2cb","vip":1,"crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"3582504836067709","idStr":"3582504836067709"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9042671217","repostId":2247357056,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9042660969,"gmtCreate":1656468461951,"gmtModify":1676535835606,"author":{"id":"4112410321254552","authorId":"4112410321254552","name":"blessed_1","avatar":"https://community-static.tradeup.com/news/71622697830d9517eb67a61917d8a95f","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":4,"crmLevelSwitch":1,"authorIdStr":"4112410321254552","idStr":"4112410321254552"},"htmlText":"Buy for mid to long term&nbsp;","listText":"Buy for mid to long term&nbsp;","text":"Buy for mid to long term","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9042660969","repostId":2247357056,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9042614154,"gmtCreate":1656467298078,"gmtModify":1676535835361,"author":{"id":"4117923877834922","authorId":"4117923877834922","name":"YnR V","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"authorIdStr":"4117923877834922","idStr":"4117923877834922"},"htmlText":"[Cool]&nbsp;","listText":"[Cool]&nbsp;","text":"[Cool]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9042614154","repostId":2247357056,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9042615722,"gmtCreate":1656467263766,"gmtModify":1676535835343,"author":{"id":"3582192196234738","authorId":"3582192196234738","name":"Penthon","avatar":"https://static.tigerbbs.com/5f9fe77bd547ced80b3a9f115de46ca8","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":3,"crmLevelSwitch":1,"authorIdStr":"3582192196234738","idStr":"3582192196234738"},"htmlText":"Expected still strong demand on DRAM s[Happy]&nbsp;. Despite igns if global recession...","listText":"Expected still strong demand on DRAM s[Happy]&nbsp;. Despite igns if global recession...","text":"Expected still strong demand on DRAM s[Happy] . Despite igns if global recession...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9042615722","repostId":2247357056,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9042636337,"gmtCreate":1656466255229,"gmtModify":1676535834996,"author":{"id":"3581764784067746","authorId":"3581764784067746","name":"kencarrot","avatar":"https://static.tigerbbs.com/99bb3314847ae532130ee6780cc9cd98","vip":1,"crmLevel":4,"crmLevelSwitch":1,"authorIdStr":"3581764784067746","idStr":"3581764784067746"},"htmlText":"Lol","listText":"Lol","text":"Lol","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9042636337","repostId":2247357056,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":135,"commentSize":13,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2247357056"}