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JPMorgan analyst Harlan Sur expects to see a better-than-expected outlook for the May quarter and in-line results for the prior quarter.
“We see sustained improvement in DRAM and NAND fundamentals for the remainder of the year and expect FY/CY22 numbers to be revised higher post the call with MU earnings power of $13-$14 exiting CY22 (Street at $12). We anticipate shares to start to inflect higher towards their historical 8-12x range as the market starts to discount the solid fundamental set up for the rest of CY22. We remain OW MU on the strong 2 demand/supply outlook,” Sur wrote in a client note.
Similarly, Morgan Stanley analyst Joseph Moore expects to see upside for the February quarter, in addition to the in-line outlook for the ongoing quarter. He added that Micron may guide conservatively.
“We would expect upside around the February quarter results, given that pricing was modestly better in DRAM, and that a competitor had a supply issue in NAND with 2 weeks to go in Micron’s quarter, which likely drove some upside volumes late in the quarter. In terms of the outlook, we would expect the company to guide around in-line with consensus, or slightly lower – our number is slightly lower – but to some degree we see that as Micron’s normal conservatism, given what is still a fairly wide range of outcomes for 2q pricing across all markets,” Moore said in a client note.
On the risk side, Moore is worried about the oversupplied DRAM market as well as much weaker China smartphone sales.
By Senad Karaahmetovic
