Here’s what Wall Street is saying about Micron ahead of earnings

Micron Technology (MU) is scheduled to report results of its fiscal third quarter after the market close on Wednesday, June 28, with a conference call scheduled for 4:30 pm ET. What to watch for:

GUIDANCE: Along with its last report, Micron guided for Q3 adjusted earnings per share of ($1.65)-($1.51) on revenue of $3.5B-$3.9B. At the time, analysts were expecting the company to report Q3 EPS of (90c) on revenue of $3.7B, but those figures have since dropped to ($1.58) and $3.65B, respectively.

CITI SEES ‘UGLY QUARTER’: Yesterday, Citi reiterated a Buy rating on Micron with a $75 price target ahead of fiscal Q3 report on June 28. The firm expects the company to miss Q3 consensus estimates and guide Q4 below consensus given DRAM market weakness and the China ban. However, Citi still believes Micron fundamentals are driven by the DRAM cycle and it expects a DRAM recovery in the second half of 2023, driven by undersupply regardless of the China ban.

PT INCREASES: Earlier this week, several securities analysts raised their price targets on Micron ahead of its quarterly report. Stifel’s Brian Chin maintained a Hold rating on Micron and raised his price target on the shares to $65 from $55, saying he expects a mixed quarter relative to expectations and has adjusted its revenue forecast toward the lower-end of the guidance range and also lowered its August-end quarter outlook after weighing the recently-imposed China restrictions.

Meanwhile, Wedbush analyst Matt Bryson increased the firm’s price target on Micron to $80 from $65 and kept an Outperform rating on the shares. The analyst expects Q3 numbers will likely be relatively in-line with expectations as it thinks Micron’s bent towards providing conservative guidance and continued focus on costs should offset what may have been a more aggressive than initially expected pricing environment. Looking forward to Q4 though, Bryson sees some potential that guidance will be below consensus given some combination of lost revenue in China, some follow on implications from more aggressive memory pricing in early Q2, and Micron’s tendency to be conservative with its guide.

Additionally, Evercore ISI’s C.J. Muse maintained an Outperform rating on Micron and raised the firm’s price target to $80 from $75, saying the firm Wedbush analyst Matt Bryson raised the firm’s price target on Micron to $80 from $65 and keeps an Outperform rating on the shares ahead of quarterly results. Muse expects Q3 numbers will likely be relatively in-line with expectations as it thinks Micron’s bent towards providing conservative guidance and continued focus on costs should offset what may have been a more aggressive than initially expected pricing environment. Looking forward to Q4 though, the analyst sees some potential that guidance will be below consensus given some combination of lost revenue in China, some follow on implications from more aggressive memory pricing in early Q2, and Micron’s tendency to be conservative with its guide.

CHINA EXPORTS: The White House is weighing new restrictions on exports of artificial intelligence chips to China, as worries rise over the power of the technology in the hands of U.S. rivals, the Wall Street Journal’s Asa Fitch, Yuka Hayashi, and John D. McKinnon (NVDA) and other semiconductor makers, including potentially Micron, to customers in China and other countries of note without first obtaining a license, according to the report. The Fly notes that, in May, Beijing told Chinese companies that deal with critical information to stop purchasing products from Micron, The New York Times’ Chang Che reported at the time.