American chip maker Micron Technology (NASDAQ:MU) is slated to release its second quarter Fiscal 2023 results on March 28, 2023, after the market closes.
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The Street expects Micron to post an adjusted loss of $0.67 per share on revenues of $3.73 billion. The current expectations show a significant decline compared to Micron’s historical performance. Remarkably, in Q2FY22, Micron posted an adjusted profit of $2.14 per share on revenues of $7.79 billion.
Analysts Expect Weak Results Yet Remain Bullish
Micron is a leader in the dynamic random-access memory (DRAM) and NAND chip markets. The elevated levels of inventories of these chips at both Micron and its customers are forcing the company to write down its inventories. Having said that, analysts are expecting the memory chip market to make a strong comeback by the end of Fiscal 2023.
Today, analyst Ambrish Shrivastava of BMO Capital reiterated a Buy rating on MU with a price target of $67, implying 9.6% upside potential. Ahead of Micron’s results, Shrivastava cut the FY23 and FY24 estimates for the chip maker, citing lower pricing power and slower demand. Nevertheless, the analyst noted that Micron has proactively navigated the steep memory chip downturn and views a reasonable risk/reward profile for its shares.
Furthermore, Citigroup analyst Christopher Danely reiterated a Buy rating on MU stock with a price target of $75 (22.6% upside potential). Danely believes Micron will report a huge inventory write-down in its Q2 results as well as negative margins for the first time in over a decade.
Despite the weakness, Danely believes there is only an upward trend going ahead for Micron as the market for its memory chips is bottoming out.
Is Micron a Buy, Hold, or Sell?
With ten Buys and three Hold ratings, Micron commands a Strong Buy consensus rating on TipRanks. Also, the average Micron Technology price target of $67.25 implies a nearly 10% upside potential from current levels. Meanwhile, MU stock has gained 21.4% so far this year.
Ending Thoughts
Despite the current weakness in the memory chip market, analysts believe that Micron is well-positioned to gain from the reversal in trends. The stock has a Strong Buy consensus along with reasonable upside potential for the next twelve months.
