Micron's Latest Earnings Call Was A 'Body Blow To The Bears': Analysts Weigh In

Micron Technology, Inc. MU stock was trading 2.5 percent higher Thursday afternoon following a slew of bullish ratings from Wall Street. The company posted a third-quarter earnings beat and guidance for the fourth quarter above consensus estimates.

The Street Weighs In

Despite consistently beating estimates, there has been a cloud hanging over memory companies for months. Investors have been concerned that the memory cycle have peaked.

Micron’s latest earnings were a “body blow to the bears” though, said Credit Suisse analyst John Pitzer in a note.

Supply growth industry-wide has been structurally slowing and memory will continue to become increasingly important for developing technologies. Consensus among analysts is that these trends are real and will be long-lasting.

Ambrish Srivastava of BMO Capital Markets, one of only a few to withhold a fully bullish rating, noted that Micron maintained strong execution on its product transitions. That said, mixed NAND results held the analyst’s rating at Market-Perform.

Stifel’s Kevin Cassidy highlighted cloud-related sales as a tailwind, with NAND and RAND revenues 24 percent and 33 percent higher, respectively, over the past quarter. Higher investment is expected to keep the segment growing, and management has not seen any inventory buildup.

On the heels of a recent Asia field trip, Baird’s outlook on the market flipped. “We no longer expect second-half tightening in NAND flash supply/demand trends,” said analyst Tristan Gerra, citing double-digit content increases as a key catalyst.

“Yes,” said Rosenblatt Securities’ Hans Mosesmann, “[it’s] another one of those beat-and-raises.”

The Ratings

Here’s how the street came out on Micron Thursday, in order of least-to-most bullish. Get our full analyst coverage in real-time by subscribing to Benzinga Pro.

• BMO Capital Markets reiterated a Market Perform rating and $63 price target.
• Credit Suisse reiterated an Outperform rating and raised its price target from $80 to $90.
• Baird reiterated an Outperform rating and $100 price target.
• Stifel reiterated a Buy rating and raised its price target from $106 to $108.
• Rosenblatt reiterated a Buy rating and raised its price target from $115 to $120.

The stock was trading around $60.38 at time of publication.

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