Micron (MU) is scheduled to report results of its fiscal fourth quarter after the market close on Thursday, September 29, with a conference call scheduled for 4:30 pm ET. What to watch for:
GUIDANCE: Along with its last report, Micron guided for Q4 earnings per share of $1.63, plus or minus 20c, on revenue of $7.2B, plus or minus $400M. At the time, analysts were expecting the company to report Q4 EPS of $2.62 on revenue of $9.05B, but those figures have since slipped to $1.30 and $6.68B, respectively. In early August, however, Micron said that revenue may come in at or below the low end of its proposed guidance range.
NEW INVESTMENTS: The same day U.S. President Joe Biden signed into law a bill providing $52.7B in subsidies for U.S. microchip production and research, Micron announced plans to invest $40B through the end of the decade to build memory manufacturing in multiple phases in the U.S. Micron expects to begin production in the second half of the decade, ramping overall supply in line with industry demand trends. In early September, the company also said it intends to invest roughly $15B through the end of the decade to construct a new fab for leading-edge memory manufacturing in Boise, Idaho. This will be the first new memory manufacturing fab built in the U.S. in 20 years, ensuring domestic supply of leading-edge memory required for market segments like automotive and data center, fueled by accelerating adoption of artificial intelligence and 5G, the company said.
LYNX: Ahead of the quarterly report Thursday, Lynx analysts KC Rajkumar and Jahanara Nissar raised the firm's price target on Micron to $56 from $50, saying the stock had hit their prior "Street-low" price target of $50 last week. While acknowledging they "may be early with this call," the pair tell investors that "for the first time all year we believe macro and micro conditions are evidencing tentative signs of stabilization."
JPMORGAN: Earlier this week, JPMorgan analyst Harlan Sur cut his price target on Micron Technology to $65 from $80 and maintained an Overweight rating on the shares. The analyst said spot pricing for 4Gb DDR4 DRAM has dropped 20% quarter-over-quarter in Q3 while 512Gb NAND spot pricing has declined more than 30% sequentially as bit demand is "coming in substantially lower than expected on increasing macro headwinds that are now impacting nearly all end markets."
CITI: Last week, Citi analyst Christopher Danely said that recent U.S. supply chain discussions continue to point to a "sharp decline" in DRAM memory prices in Q3 and Q4. Weak smartphone and PC units are driving high single digit demand bit growth, below the long-term low to mid teens growth, Danely tells investors in a research note. Assuming 10% DRAM demand bit growth next year, he models DRAM capex cuts ~ 30% or in-line with 2018/2019 correction. Danely expects Micron to guide fiscal 2023 capex down 35%-40% year-over-year next week from the $12B in fiscal 2022.
Micron
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