What 7 Analysts Think of Micron Technology's Q4: Excess Inventory, Product Demand

Shares of Micron Technology Inc MU tanked in early trading on Thursday, despite the company delivering upbeat fourth-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from Micron Technology’s earnings release.

BMO Capital Markets On Micron Technology

Analyst Ambrish Srivastava maintained an Outperform rating and price of $80.

“Micron's results, guidance, commentary on GM, CapEx, were all largely in line with our expectations,” Srivastava said in a note.

The analyst raised the earnings estimates for fiscal 2024 from a loss of $2.57 per share to a loss of $2.30 per share, reflecting higher revenues.

Piper Sandler On Micron Technology

Analyst Harsh Kumar reiterated a Neutral rating and price target of $70.

Micron Technology reported better-than-expected results and mixed guidance for the first quarter, Kumar said. “Most importantly, excess inventory appears to have cleared in most of MU's end markets,” he added.

Management said the data center business is likely to have bottomed and inventory is likely to normalize in early 2024, the analyst mentioned. “We suspect that pricing for both DRAM and NAND will improve nicely into 2024 as well,” he added.

Mizuho Securities On Micron Technology

Analyst Vijay Rakesh reaffirmed a Buy rating and price target of $82.

Micron Technology ended the quarter with inventory at 170 days, “with $1B of strategic inventory and expectations of improving inventory levels through 1HF24E after inventory dollars rose ~2% q/q,” Rakesh wrote in a note.

“We believe MU is seeing demand for HBM products come in ahead of prior expectations,” the analyst wrote. “MU has redeployed some unutilized equipment to help ramp leading-edge node products in both DRAM and NAND,” he added.

Check out other analyst stock ratings.

Stifel On Micron Technology

Analyst Brian Chin maintained a Hold rating and price target of $65.

Micron Technology guided to similar losses for the first quarter despite improved revenue and gross margins, Chin said in a note.

“Though there might be some disappointment that Micron is suggesting a more gradual rate of GM improvement/profitability recovery over the coming quarters — we believe this is balanced by its plans to further control/restrict output as a means of structurally tightening supply and improving utilization/margins,” he added.

BofA Securities On Micron Technology

Analyst Vivek Arya reiterated a Neutral rating and price target of $70.

“The earliest we see Micron achieving pf-EPS breakeven is a year from now (Q4’FY24E), with FCF improvement lagging pf-EPS breakeven,” Arya said.

He reduced the pro forma earnings estimate to a loss of $1.75 per share, from the prior forecast of a loss of 76 cents per share, “as a variety of fab underutilization charges, higher opex, rising capex and taxes challenge profitability.”

Needham On Micron Technology

Analyst Quinn Bolton reaffirmed a Buy rating and price target of $75.

Both DRAM and NAND pricing seems to have bottomed and “should increase significantly” in the back half of fiscal 2024, Bolton said in a note.

The industry’s supply/demand dynamics are improving, which “supports a better pricing environment into CY24 and lays the foundation for higher revenue and margins/profitability,” he added.

Morgan Stanley On Micron Technology

Analyst Joseph Moore maintained an Underweight rating and price target of $58.

“Outlook slightly lower vs. expectations, but conditions are improving; still, we believe there continues to be longer-term oversupply,” Moore wrote in a note.

“Key will be how normalization of depressed fab utilizations plays out,” the analyst said. “The company had a positive view on that topic on the call but we remain cautious,” he added.

MU Price Action: Shares of Micron Technology had declined by 3.46% to $65.82 at the time of publication Thursday.

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Photo: Courtesy Micron Technology