By Sam Boughedda
Micron Technology (NASDAQ:MU) is set to report earnings for its latest quarter on Thursday, September 29, after the market closes.
The company's shares are down over 47% in 2022, and investors will be hoping there is something to cheer about when the semiconductor manufacturing firm posts its earnings release.
Ahead of the data, a Morgan Stanley analyst told investors in a note that "as the stock comes down, the proximity to book value has swung sentiment clearly to the positive side, based on our conversations; we don't expect anything to come out of these earnings that would discourage that."
They continue to believe there is too much optimism about this recovery in 1h23. "We do expect volumes to improve, as customer inventory drawdowns slow, but the pace of inventory builds (15-20 days of inventory build in Micron's balance sheet in each August and November quarters) would suggest that even with a 10%+ volume recovery in the seasonally weak quarter, the company would still be building 10+ days of inventory - which continues to pressure the market," wrote the analyst.
Elsewhere, a Susquehanna analyst told investors in a note that their updated estimates "reflect lower UR as MU, along with the industry, becomes aggressive in working down inventories (by cutting wafer starts)."
"We now expect rough quarterly EPS of $0.25. BV of ~$45 should be considered as the downside risk," stated the analyst.
Meanwhile, a Cowen analyst said another estimate cut for Micron is "kind of anticipated" at this point.
"We are still below the Street for the next FY. Buy-side sentiment remains negative. While the stock is trading close to book value, and we do not see a lot of downside...the challenge is, there is not a lot of NT upside for investors. Memory fundamentals are challenging, but MU is a stock that is worth it for LT investors," wrote the analyst.