Micron Expected To Deliver A Q1 Beat And Raise

Analyst Betsy Van Hees of Loop Capital recommends investors with a higher risk/reward tolerance to Buy Micron Technology, Inc. MU shares as she expects a beat-and-raise first quarter on improving DRAM and NAND pricing.

Micron will report its first quarter results on December 21 and Van Hees expects pro forma EPS of $0.32 on revenue of $3.98 billion above the Street ($0.23/$3.86 billion) with revenue towards the high-end of the guidance range and pro forma EPS above the guidance range.

The analyst also sees second quarter pro forma EPS of $0.39 on revenue of $4.06 billion, also above the Street ($0.35/$3.87 billion).

“We believe MU will benefit from improved pricing dynamics in both DRAM and NAND driving improvements to pro forma GM and OM,” Van Hees wrote in a note.

Further, the analyst expects the recent acquisition of Inotera to boost DRAM pro forma GM by about 200bps in the second quarter and increase free cash flow.

Van Hees launched coverage of Micron with a Buy rating and a $25 price target as she expects positive tailwinds from favorable near-term memory fundamentals to continue.

At last check, shares of Micron were up 0.29 percent to $20.08.