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Credit Suisse Bullish On Micron Ahead Of Q2 Results, Raises Target To $70

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Credit Suisse Bullish On Micron Ahead Of Q2 Results, Raises Target To $70

Micron Technology, Inc. (NASDAQ: MU) is scheduled to report its fiscal second quarter results after Thursday's close and investors should be buyers ahead of the print, according to Credit Suisse.

The Analyst

Credit Suisse's John Pitzer maintains an Outperform rating on Micron's stock with a price target lifted from $60 to $70.

The Thesis

Micron is expected to report $2.73 per share on revenue of $7.28 billion, which would be consistent with its pre-announcement in February, Pitzer said in a note.

DRAM revenue is expected to rise 10.5 percent quarter-over-quarter to $5.08 billion driven by a 6 percent increase in bit shipments and a 4 percent increase in average selling price, Pitzer said. It's important to note the analyst's expectations for DRAM ASPs are "modestly below broader contract pricing trends, reflecting the impact of long-term contracts." NAND revenue is expected to rise to $1.91 billion. The company likely saw an 8 percent increase in bit shipments, but a 7 percent decline in ASPs.

The company is also expected to post a gross margin of 58.1 percent with a DRAM gross margin of 64.4 percent and NAND gross margin of 47.5 percent. Operating expenditure is expected to come in at $680 million.

Looking forward to the fiscal third quarter, Micron will likely guide its revenue to be in a range of $7.5 to $7.7 billion and EPS in a range of $2.85 to $2.95. Pitzer said these estimates are "well above" the Street's estimates of $7.2 billion and $2.60 per share, but he's modeling Micron's EPS to be above $3.00.

Price Action

Shares of Micron were trading higher by 1.6 percent at $61.08.

Related Links:

Baird Turns Incrementally Bullish On Micron, Cites Stronger Memory Outlook

Nomura Nearly Doubles Micron Price Target, Says Semiconductor Maker Has Further Upside Ahead

Latest Ratings for MU

DateFirmActionFromTo
Nov 2019Initiates Coverage OnAccumulate
Sep 2019MaintainsSell
Sep 2019MaintainsUnderperform

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