Micron Technology Earnings Were 'Materially Worse' Than Expected: 6 Analysts Comment

Micron Technology Inc. MU released fiscal fourth-quarter results after the closing bell on Thursday. The Boise, Idaho-based company reported downbeat revenues of $6.64 billion and adjusted earnings of $1.45 per share, ahead of the consensus estimate.

Here are the key takeaways, according to six analysts:

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Morgan Stanley

“The outlook was materially worse than our below-consensus expectation,” says analyst Joseph Moore, who maintained an Underweight rating.

The fourth quarter was challenging for Micron Technology, Moore said, reducing the price target from $56 to $49.

“The company will hit the brakes on supply, and is generally executing well, but we see oversupply persisting through CY23,” he added.

BMO Capital Markets

Analyst Ambrish Srivastava reiterated an Outperform rating, while reducing the price target from $80 to $70.

“FCF is going to be a much worse number for F1Q vs. our model, at a burn of $1.5B,” Srivastava wrote in a note. “On the positive side, Micron is responding proactively and much more aggressively to rein in supply,” he added.

Mizuho Securities

Analyst Vijay Rakesh reaffirmed a Neutral rating, while reducing the price target from $56 to $52.

“We have noted concerns remaining around PC and Mobile weakness as well as potential for Server softness,” Rakesh said. “Unless YMTC (Yangtze Memory Technologies Co) becomes completely restricted, NAND could be a significant headwind in 2023E, with YMTC NAND pricing 15-25% below NAND from other OEMs,” he further wrote.

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Rosenblatt Securities

Analyst Hans Mosesmann maintained a Buy rating and a price target of $100.

“Micron’s outlook off a pre-announced Aug quarter was for a huge sequential decline in sales (down 36% q/q), driven by a combination of end demand weakness (PC and Smartphone mostly), and a bigger than expected desire by customers in all market segments to reduce inventories,” Mosesmann said.

“For the November and February quarters, the revenue dynamic is both units (bits) and ASP driven,” he added.

Needham

Analyst Rajvindra Gill reiterated a Buy rating, while reducing the price target from $64 to $60.

“Inventory adjustments across all end markets drove a sizable 4QFY22 top-line miss ($6.6BN vs. $7.2BN guide) and even bigger 1QFY23 guide down ($4.25BN vs. the street's $5.7BN),” Gill wrote in a note. “Concerns of a global economic slowdown have companies tightening their belts, and the still-cyclical memory industry is feeling the sting,” the analyst added. "Next year could be the mirror image of this year."

KeyBanc Capital Markets

Analyst John Vinh reaffirmed an Overweight rating and a price target of $70.

Micron Technology expects the oversupply challenges to persist through the first half of fiscal 2023, with a recovery expected in the second half, Vinh said. “We're lowering estimates and remain OW, as we see favorable risk/reward and compelling LT secular trends for MU,” he added.

MU Price Action: Shares of Micron Technology had risen by 3.10% to $51.56 at the time of publication Monday.