Semiconductor giant Micron Technology, Inc. (NASDAQ:MU) is scheduled to report its fourth quarter and Fiscal year 2022 results on September 29, after the market closes. Micron produces computer memory and computer data storage including dynamic random-access memory, flash memory, and USB flash drives. Amid the slump in demand for personal computers coupled with increasing costs, MU stock has lost 46.6% so far this year.
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The Street expects Micron to post adjusted earnings of $1.37 per share in Q4, significantly lower than its comparative prior year period’s figure of $2.42 per share. Meanwhile, revenue is pegged at $6.78 billion, representing a year-over-year decline of a whopping 18%, as well as much lower than Q3FY22 revenue of $8.64 billion.
Analysts’ Expectations from Micron’s Q4 Results
Analyst Hans Mosesmann of Rosenblatt Securities believes Micron will report in line with his estimates for revenue and adjusted EPS of $6.70 billion and $1.24 per share, respectively. Moreover, the five-star analyst expects revenue and gross margins to decline sequentially owing to logistics issues.
Furthermore, the analyst is skeptical about MU’s capability to drastically reduce capital expenditures in FY23. Also, he expects the management’s tone to be conservative in the post-earnings call owing to the short-term challenges.
Nonetheless, Mosesmann is encouraged by Micron’s recent announcement of a $15 billion investment in a high-end memory manufacturing fab in Boise, Idaho. Notably, Micron expects to invest up to $40 billion to build leading-edge fabs in the U.S.
Similarly, Cowen & Co. analyst Krish Sankar reiterated a Buy rating on MU ahead of its earnings. The analyst has a $70 price target which implies 43.2% upside potential to current levels.
Sankar believes the company may announce further estimate cuts for FY23 during the call. A lack of near-term catalysts plays a spoiler for Micron, but Sankar believes in the long-term value proposition of the stock.
On the other hand, Wedbush analyst Matt Bryson cut the price target on MU stock to $65 (33% upside potential) from $85 while maintaining a Buy rating.
Bryson believes that the management’s outlook for Q4FY22 was not conservative enough to include the recent dimming demand from the cloud.
On similar lines, Evercore ISI analyst C J Muse lowered the price target on MU to $70 from $75 while keeping his Buy rating.
Muse believes Micron will report the Q4 figures below the low end of the guidance. Moreover, he expects management to give Q1FY23 numbers below consensus estimates.
Is Micron a Buy, Sell or Hold?
Analysts remain split on Micron stock’s future trajectory. On TipRanks, MU stock has a Moderate Buy consensus rating. This is based on 16 Buy, four Hold, and two Sell ratings given during the past three months. The average Micron Technology price target of $67.18 implies 32% upside potential to current levels.
Ending Thoughts
Micron and other semiconductor companies are battling the near-term headwinds of an economic slowdown, dimming demand for end products owing to inflation, and intense competition. Wall Street experts have differing opinions about Micron’s stock. Investors may choose to await the fourth quarter results and future guidance to make informed investment decisions.
