Micron’s Earnings Will Probably Disappoint, Analysts Say. Blame Chip Charges.

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A decline in prices for the memory elements

Micron Know-how

produces, as nicely as bigger logistics fees, necessarily mean the company’s quarterly results are probably to be decrease than Wall Street expects, states 1 analyst from

Barclays
.

Wedbush Securities weighed in with a downbeat investigation observe as well, following downgrades to the stock by other companies before in the thirty day period.

“MU carries on to outperform the industry on cost declines on the ‘front- end’ but we believe that that worsening logistics/freight probably weigh on the again stop, earning price tag declines a lot more tough. As a end result, we lower quantities to reflect the weakening pricing surroundings and decrease some cost declines,” analyst Tom O’Malley wrote in a study take note.

He reduced his value concentrate on for the memory-chip enterprise to $75 from $105, but managed an Over weight score on the inventory, citing “weaker pricing” for Micron’s (ticker: MU) NAND and DRAM chips. Lower costs are probably to signify earnings will be decrease than envisioned, and that administration will issue weaker money forecasts than expected for the quarter that ends in August, he said. 

For the company’s third fiscal quarter, ended in May perhaps, O’Malley expects revenue of $8.6 billion and earnings of $2.39 per share. The consensus call among the analysts tracked by

FactSet

is that earnings will be $8.65 billion, though earnings will occur in at $2.45 a share.

For the August quarter, O’Malley estimates that the company’s profits will be $8.91 billion and earnings will be $2.41 for each share. The consensus expectation on FactSet is for income of $9.23 billion and earnings of $2.63 a share.

Wedbush Securities analyst Matt Bryson also sees pricing issues for the corporation, saying in a analysis be aware that “softening demand from customers for customer oriented DRAM and NAND together with considerations that company markets could also falter, have weighed additional seriously on pricing (significantly in the thirty day period of June) setting up a more challenging around-time period natural environment.”

On the other hand, Bryson preserved his Outperform ranking and $120 price focus on on the stock. He stated he expects a “more positive pricing cycle in 2023.”

“We see no cause to shift our Outperform ranking even into earnings that will practically surely establish disappointing vs. consensus,” Bryson claimed.

Micron been given some downgrades from analysts earlier this thirty day period, like 1 by Summit Insights analyst Kinngai Chan, who cited demand troubles and probable investing cuts from cloud-assistance vendors. Continue to, most of the 30 analysts tracked by FactSet that cover Micron are constructive on the corporation, with 26 score the stock at a Invest in. A few charge it at Keep and a person has it at Promote.

Write to Angela Palumbo at [email protected]