Micron Technology Sees Mixed Performance Amid Market Struggles

Micron Technology, Inc. (MU), with a market capitalization of $86.9 billion, is engaged in the design, development, manufacturing, and sales of memory and storage products. Its offerings include Dynamic Random Access Memory, NAND flash memory, NOR Flash, and 3D XPoint memory, serving various sectors such as computing, consumer electronics, networking, and mobile devices.

Stock Performance Overview

Over the past 52 weeks, Micron has underperformed the broader market significantly. Its shares have dropped by 29.1%, while the S&P 500 Index ($SPX) has increased by 11.7%. Year-to-date, Micron’s stock is down 7.6%, contrasted with the S&P 500’s loss of 4.7%.

Comparison with Industry ETFs

Focusing more closely, Micron has also lagged behind the iShares Semiconductor ETF (SOXX), which fell by 11.2% over the same period. However, on a year-to-date basis, Micron has outperformed SOXX, which has declined by 14.8%.

Recent Earnings Report

On March 20, Micron announced better-than-expected Q2 earnings, reporting revenues of $8.1 billion and adjusted EPS of $1.56, both exceeding Wall Street forecasts. Year-over-year, revenue grew by 38.3%, with adjusted EPS soaring by 271.4%, fueled by increased gross margins and operating income. Despite this robust performance, shares plummeted 8% in the following trading session. Concerns over sequential declines in revenue and profits, rising inventory levels, and weaknesses in the automotive and mobile segments likely contributed to the drop. Additionally, an oversupply in NAND products and pricing pressures has raised worries about future profitability.

Future Earnings Expectations

For the current fiscal year ending in August, analysts anticipate that Micron’s EPS will surge by 970.7% year over year to $6.21. The company’s earnings surprise record over the past four quarters has been promising, consistently beating consensus estimates.

Analyst Ratings Overview

The consensus rating among 30 analysts for Micron is a “Moderate Buy,” comprising 21 “Strong Buy” ratings, three “Moderate Buy” ratings, four “Hold” ratings, and two “Strong Sell” ratings. This outlook reflects a slight shift from a month ago, where a higher number of analysts recommended a “Strong Buy.”

Price Targets

On April 30, C.J. Muse from Cantor Fitzgerald maintained a “Buy” rating on Micron, adjusting the price target to $130. This price suggests a potential upside of 67.2% from current levels. The average price target for Micron stands at $125.73, indicating a 61.7% upside, while the highest forecast of $172 implies an ambitious upside of 121.2%.

On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.