Analysts Remain Bullish On Micron Despite Lower Than Expected Q3 Outlook

By Carly Forster

Micron Technology (NASDAQ:MU) shares jumped 5% in after-hours trading on Wednesday, April 1 after the company posted a better than expected second quarter earnings report due to tax benefits and modest sales growth during the quarter.

Highlights from the report include diluted earnings of $0.81 a share on $4.17 billion in revenue, coming ahead of analysts’ expectations of $0.73 earnings per share and $4.15 billion in revenue.

CEO Mark Durcan said of the company’s results, “Micron posted another solid quarter in our fiscal Q2 2015. We are pleased with our progress on technology and product migrations and remain confident in the performance of our business.”

Despite the impressive report, investors were not too keen on Micron’s outlook for the third quarter. While analysts expect the company to post earnings of $0.77 a share and $4.3 billion in revenue, Micron has forecasted earnings of $0.70 a share and $3.9 billion in revenue.

Micron is best known for producing semiconductor devices, including DRAM, SDRAM, flash memory chips, and SSDs.

Just a few weeks ago, Micron also announced with Intel (NASDAQ:INTC) that 3D NAND technology, the world’s highest-density flash memory, is now available. 3D NAND technology is now expected to make a significant impact on Micron’s financials by raking in more revenue while saving on costs.

On April 2nd, Piper Jaffray analyst Ruben Roy maintained an Overweight rating on Micron but cut his price target from $41 to $35. The analyst also slashed his estimates for the next quarter due to Micron’s “lower than expected outlook for F3Q.” However, Roy “continue[s] to view the longer-term fundamentals for the DRAM industry as positive and… view MU shares as inexpensive.”


Overall, Ruben Roy has a 57% success rate recommending stocks and a +12.4% average return per recommendation.

Similarly on April 2nd, Needham analyst Rajvindra Gill maintained a Strong Buy on Micron, but lowered his price target from $60 to $50 according to SmarterAnalyst. The analyst lowered his price target due to “NT headwinds as [Micron] adjusts its portfolio,” but added that “these strategic changes should ultimately benefit [Micron’s] LT competitive position.”


Overall, Gill has a 59% success rate recommending stocks and a +19.9% average return per recommendation.

On average, the top analyst consensus for Micron on TipRanks is Moderate Buy.