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

Micron Technology (MU) is scheduled to report results of its fiscal first quarter after the market close on Wednesday, December 20, with a conference call scheduled for 4:30 pm ET. What to watch for:

GUIDANCE: On November 28, Micron updated its Q1 earnings and revenue guidance that it initially provided with its last earnings report. As of the update, the company is guiding for Q1 adjusted earnings per share of ($1.00) on revenue of about $4.7B. At the time, analysts were expecting the company to report Q1 EPS of (99c) on revenue $4.46B, and those figures have since changed to (97c) and $4.64B, respectively.

BOFA UPGRADE: Late last week, BofA analyst Vivek Arya upgraded Micron to Buy from Neutral with a price target of $95, up from $77. The firm, which expects some intra-sector rotation after a 60% year-to-date run in the SOX, also expects continued secular growth tailwinds in Generative AI, chip complexity, auto content, fab reshoring, and CHIPS Act benefits. The analyst also raised the firm’s semiconductors industry estimates, staying “selectively positive” in its “thematic 3C’s” of Cloud, Cars, and Complexity, while adding that it remains “lukewarm” on smartphones, telco and the enterprise.

JPMORGAN: Meanwhile, JPMorgan told investors in a research note last week that, heading into 2024, long-term investors should continue to focus on the multi-year track record of outperformance by semiconductor stocks, driven by the “crucial role semis play in the tech value chain,” increasing content tailwind opportunities in all applications, and structural profitability. The firm said all of these remain intact and sets up well for continued outperformance relative to the broader indices in 2024. JPMorgan believes we are at the cusp of a semiconductor up-cycle with industry revenue growth turning positive year-over-year in Q4, which should persist through 2024 and into 2025. The firm’s top semiconductor picks for 2024 are Analog Devices (ADI), Marvell (MRVL), Micron, and Microchip (MCHP).

PT CHANGES: No fewer than five firms raised their price targets on Micron ahead of the company’s earnings, with TD Cowen raising its price target to $100 from $78. The firm said as memory suppliers show resiliency and sustainability of supply cuts, investor sentiment has improved significantly over the past 3 months and Cowen believes there is still room for improvement. Also notably, Susquehanna analyst Mehdi Hosseini raised the firm’s price target on Micron to $112 from $90 and kept a Positive rating on the shares, saying he updated estimates into 1Q earnings. The firm believes that with price recovery now underway, the next catalyst for the stock is margin recovery and the consequent impact on earnings power.