JPMorgan Sees Micron Technology (MU) Guidance As Conservative, PT To $75

JPMorgan analyst, Harlan Sur, reiterated his Overweight rating on shares of Micron Technology (NASDAQ: MU) and cut his price target to $75 from $84 after the company reported F4Q18 (Aug-Q) revenue/EPS above the high end of guidance on solid execution in a strong demand environment, led by cloud data center, with continued favorable pricing in DRAM. Despite a meaningful decline with NAND pricing during the quarter, Micron’s NAND gross margin actually increased modestly Q/Q as the team continues to benefit from positive mix trends (increased SSD) and from solid cost execution. However, Micron’s F1Q19 (Nov-Q) guidance was below consensus as an inventory adjustment at a few customers, impact of CPU shortages in the PC segment and tariff related
cost increases impacted revenue, GM and EPS guidance.

The analyst stated "we believe Micron's guidance is conservative as the team has consistently delivered financial results above the midpoint of guidance or above the guided range over the past few years. Despite negative sentiment in memory fundamentals heading into the call (with Micron’s outlook not helping matters), we expect broader supply/demand fundamentals to remain in relative balance as suppliers remain rational in adding bit supply and we believe demand for memory will remain strong and broad-based with particular strength in data center demand which is MU’s largest end-market".

For an analyst ratings summary and ratings history on Micron Technology click here. For more ratings news on Micron Technology click here.

Shares of Micron Technology closed at $43.55 yesterday.

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