Analysts Trim Views On Micron Technology

Micron Technology, Inc. MU shares slid Wednesday after the company said it will cut second-quarter production for retooling and analysts trimmed forecasts.

Chief Executive D. Mark Duncan forecast second-quarter revenue of $4.1 billion to $4.3 billion in a conference call Tuesday, versus analysts' expectation of $4.5 billion.

Micron opened sharply lower Wednesday and recently traded at $32.07, down 2.2 percent.

Stifel's Kevin Cassidy cut his 2015 earnings estimate for Micron by 5 percent to $3.95, but maintained a Buy rating and $43 target.

While the lower revenue forecast may disappoint investors, Cassidy said the decision to cut production suggests the market for DRAM chips has become less competitive.

"Previously, slowing production would result in potential market share losses, Cassidy said, whereas companies are now more "focused on maintaining profitability rather than market share."

Similarly, Nomura's Romit Shah cut his 2015 earnings estimate by 10 percent to $3.65, and cut his target by about the same to $40.

But Shah maintained a Buy rating on the company, saying he's "looking past a trough" in the second quarter.

Goldman Sachs' Mark Delaney cut his target 9 percent to $29 and maintained a Neutral rating.

Delaney noted dependence of the DRAM market on PC sales, which could show continued weakness in 2015.