MU Stock: Micron gives a bleak look

micron technology (mo) Stocks fell on Friday after the memory chip maker badly miscalculated with its guidance for the current quarter. MU shares led other semiconductor stocks lower in the report.

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The Boise, Idaho-based company said late Thursday that it earned an adjusted $2.59 per share on sales of $8.64 billion in the third fiscal quarter ended June 2. Analysts polled by Factset had expected Micron to earn $2.43 per share on sales of $8.64 billion. On a year-over-year basis, Micron’s profits are up 38% while sales are up 16%.

For the current quarter, Micron forecast adjusted earnings of $1.63 per share on sales of $7.2 billion. Still, analysts expected earnings of $2.60 per share from sales of $9.15 billion in Micron’s fiscal fourth quarter. In the same quarter the previous year, Micron earned $2.42 per share on sales of $8.27 billion.

“Recently, the industry demand environment has weakened, and we are taking measures to adjust our supply growth in fiscal year 2023,” said CEO Sanjay Mehrotra. new version. “We are confident in the long-term secular demand for memory and storage, and we are well positioned to deliver strong financial performance across cycles.”

MU’s stock has a subpar composite rating

Micron blamed its disappointing forecast on weak smartphone and PC sales as well as supply and demand issues in China. The company also noted high inventory levels for its cloud computing customers.

On the stock market todayMU stock fell 3% to close at 53.65. During the regular session on Thursday, MU stock fell 1.3% to 55.28.

The Philadelphia Semiconductor Index, better known as SOX, fell 3.8% on Friday. SOX has the 30 largest semiconductor stocks trading in the US so far, and SOX is down 37.7%.

MU stock ranks fifth out of 10 stocks in IBD’s computer data storage industry group, according to IBD stock check. She has a subpar IBD Compound Classification Out of 46 out of 99.

The IBD composite rating is a combination of key fundamental and technical metrics to help investors gauge the strength of a stock. The best growth stocks have a composite rating of 90 or better.

Analysts cut price targets on MU . stock

At least 15 Wall Street analysts cut their target price for MU stock after the company’s earnings report. Of these analysts, 12 have a buy rating on Micron, two are neutral and the other has a sell rating.

In recent weeks, Wall Street analysts have been softening their expectations for semiconductor companies before that second quarter earnings season.

“Memory is usually the first shoe to fall in the (semiconductor) cycle,” Robert Mayer, president of Semiconductor Advisors, said in a newsletter. “Earnings season could get really ugly as more boots could go down in the tech and chip sectors.”

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