Analyst: Micron Technology Inc. Q3 Outlook Will Disappoint

Micron Technology Inc.

is likely to offer third-quarter outlook below expectations, with earnings hitting a trough in the period, an analyst said Monday. Deutsche Bank's Sidney Ho reiterated a Buy rating and $40 target while acknowledging near-term weakness in the company's key market for memory chips. Ho cut his third-quarter earnings estimate 13 percent to $0.73 cents a share, versus the current consensus forecast of $0.87 cents a share. Micron is expected to post second-quarter results and an outlook April 2. Although prices for the company's personal computer DRAM memory products have fallen sharply in recent months, Ho said pressure should ease during the second half. But expected comments from the company next month on third-quarter product pricing "are likely to be cautious," according to Ho, given weak seasonal demand. Catalysts for 2016 include higher demand from mobile, a shift to higher-grade products and technology improvements for its NAND memory products. "The stock is attractively valued while waiting for some catalysts to play out," said Ho, who nonetheless cut his 2016 earnings estimate 2 percent to $4.20 a share.