Shares of Micron fell 4.8% on Thursday after its CFO warned that the chipmaker could miss 1Q revenue guidance.
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Speaking at Keybanc’s virtual conference, Micron’s (MU) CFO David Zinsner stated that the demand outlook for memory chips is worsening, Bloomberg reported. As a result, Zinsner cautioned that 1Q (September to November) sales could come below the forecast of $5.4 billion-$5.6 billion.
Meanwhile, Zinsner kept the company’s revenues outlook for the current quarter (June to August) unchanged. Micron expects to generate sales of between $5.75 billion and $6.25 billion during the fourth quarter.
On Aug. 12, Deutsche Bank analyst Sidney Ho downgraded the stock to Hold from Buy citing lower memory chip pricing expectations due to supply-demand mismatch. In a note to clients, Ho wrote “Inventory build-up at cloud data center customers looks worse than he had anticipated, while demand from other end markets is weakening.”
Overall, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 16 Buys, 8 Holds, and 1 Sell. The average price target of $64.29 implies upside potential of about 39%. (See MU stock analysis on TipRanks).
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