5 Analysts Examine Micron Technology Following Earnings Miss, Layoffs Announcement

Shares of Micron Technology Inc MU fell more than 3% Thursday after the company missed consensus estimates on revenue and earnings for the fiscal first quarter.

According to its earnings report:

• Micron reported $4.08 billion in total bookings
• Missed revenue estimates of $4.14 billion by 1.39%
• Issued a loss per share of four cents, against an expected loss of 2 cents
• Missed its bottom line by 114.02%.

The Lehi, Utah-based company also forecasted a much steeper-than-expected second-quarter loss. It also plans to lay off 10% of its workforce in 2023, citing a nagging glut in the semiconductor market.

The earnings miss prompted a swath of analysts to issue notes to investors Thursday:

• Raymond Jamed reiterated an outperform rating, and dealt a $65 price target on the stock, 32% upside potential.
• Rosenblatt Securities issued a buy rating on the stock, with a $100 price target, 104.71% upside potential.
• Needham issued a buy rating, with a $67 price target, 37.69% upside potential.
• Mizuho reiterated a neutral rating on the stock, with a $48.00 price target, 1.36% downside potential.
• BMO Capital Markets reiterated an outperform rating on the stock, with a $67 price target, 36.68% upside potential.

Raymond James

Melissa Fairbanks at Raymond James believes Micron is approaching a bottom in terms of setting expectations for fiscal 2023 and beyond.

Management will take aggressive actions to help reduce and reset industry bit supply, amid a rebalancing of demand drivers, she explained.

Rosenblatt Securities

Hans Mosesmann at Rosenblatt said Micron’s inline topline November quarter print and outlook is the first time in several quarters in which management was not caught flat-footed.

Mosesmann indicated that a bottom is in, in terms of industry and company inventories.

Needham

Rajvindra Gill at Needham said the firm sees Micron’s revenue bottoming in the next quarter, and gross margins bottoming by the fourth-quarter of 2023.

Weakening macro, combined with inventories two-times above target, resulted in the most severe supply-demand imbalance in the last 13 years.

Needham expects Micron to retain its book value by shipping out of inventory and keeping CapEx and OpEx in check.

Mizuho Securities

Vijay Rakesh at Mizuho said Micron’s margin challenges with demand, pricing, and inventory should remain through at least the May quarter.

Softer demand at PC/Mobile/DC with weaker consumer and macro trends remain a concern.

BMO Capital Markets

Ambrish Srivastava at BMO said Micron's guidance, commentary, inventory on the balance sheet, headwind to GM from underutilization charges, ensuing cost/bit increases, and negative FCF was worse than every metric the firm had been modeling.

Price Action: Shares of Micron Technology are trading 3.97% lower to $49.16 Thursday, according to data from Benzinga Pro.

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