Micron (NASDAQ:MU) will report its fiscal fourth-quarter financial results on September 27 after the market closes. Ahead of the company’s Q4 earnings release, several analysts remain optimistic about MU and reaffirmed their Buy ratings on the stock.
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Nonetheless, the memory and storage solutions provider’s top line might have been impacted by the Chinese government’s ban on its memory and storage chips, given the company’s considerable presence in China. Furthermore, the general slowdown in the memory chip market may have had an adverse impact on the company’s results.
Overall, Wall Street expects MU to post a loss of $1.15 per share in Q4 compared with earnings of $1.45 per share reported in the prior-year period. Meanwhile, revenue is expected to fall by 40.5% from the year-ago quarter to $3.95 billion.
Q4 Earnings: Here’s What Analysts are Saying
It is worth highlighting that in the past week, four top Wall Street analysts maintained a Buy rating on MU stock, while one reiterated a Hold and one analyst gave a Sell rating.
Among the bullish analysts, Aaron Rakers of Wells Fargo sees an appealing risk/reward scenario and anticipates that management’s statements will boost confidence in the anticipated 2024 recovery.
Next, Goldman Sachs analyst Toshiya Hari reaffirmed a Buy rating and also raised the price target on Micron to $85 from $80. Hari believes that improving demand patterns and careful supply management will lead to increased prices, enhanced margins, and higher EPS. Consequently, this is expected to support the stock’s ongoing strong performance in the coming quarters.
Also, he expects to see sequential growth of 15% in Dynamic RAM (DRAM) and 18% in NAND, along with sequential declines in the average selling prices of 5% and 15%, respectively.
Meanwhile, Morgan Stanley analyst Joseph Moore is bearish on MU stock, as he maintained a Sell rating. However, the analyst raised his price target to $58.50 from $46 due to pricing improvements. Nevertheless, Moore believes the market is facing oversupply issues and that the stock’s $80 billion market cap already takes into account the highest expected cash flows.
Is MU a Good Stock to Buy?
Of the 22 analysts covering Micron, 16 have a Buy rating, five suggest a Hold, and one assigned a Sell rating in the past three months. Overall, the stock comes in as a Moderate Buy. Meanwhile, the average MU stock price target stands at $77.98, implying upside potential of 13.8%. Shares are up 36.7% year-to-date.
Insights from Options Trading Activity
TipRanks now presents options activity to help investors plan their trades ahead of earnings releases. Options traders are pricing in MU stock to move by +/-6.18% after reporting earnings. The anticipated earnings move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Ending Thoughts
Despite the current weakness in the memory chip market, analysts generally believe that Micron is well-positioned to gain from the reversal in trends. Furthermore, the expansion of the company’s high-performance HBM3 product in new markets can help increase MU’s market share.
