Micron falls as Wall Street debates mixed Q1 guidance
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Micron Technology (NASDAQ:MU) shares fell more than 4% in pre-market trading on Thursday after it offered up a mixed forecast for the coming quarter, leaving Wall Street analysts to debate whether the company is being conservative or whether the downturn in memory has more room to run.
Wedbush Securities analyst Matt Bryson said the company's forecast looks " extremely conservative," given the improvement in fundamentals in memory. He added that Micron is likely to "meaningfully exceed" the company's own forecast and as such, he reiterated the firm's outperform rating and $80 price target on the stock.
Looking ahead, Micron (MU) said it expects first-quarter sales to be between $4.2B and $4.6B, with the mid-point above the $4.21B that analysts had expected. On an adjusted basis, it expects to lose between $1 and $1.14 per share, compared to analyst expectations of an adjusted loss of 96 cents per share.
Micron (MU) also expects adjusted gross margins to be between -2% and -6%, below the 0.66% that analysts were looking for.
On the company's earnings call, Micron (MU) said that it expects capital spending in fiscal 2024 to be "slightly above" that of fiscal 2023 levels, while adding that pricing and profitability should improve throughout the year.
Shares of Western Digital (WDC) and Seagate Technology (STX) also declined on back of Micron's guidance.
KeyBanc Capital Markets analyst John Vinh also kept his overweight rating, citing encouraging signs of a "price bottom." Vinh pointed out that company said it believes the fiscal fourth-quarter was the bottom in memory pricing and pricing should improve over the next several quarters, with a return to positive gross margins and earnings per share in the second-half of next fiscal year.
Piper Sandler analyst Harsh Kumar, who has a neutral rating and $70 price target on Micron (MU), said that pricing for both dynamic random access memory and NAND should improve "nicely" next year, which should help boost earnings dramatically.
"On the heels of better pricing, we see earnings accelerating dramatically in second half of [fiscal 2024]," Kumar wrote in an investor note. 
Conversely, Mizuho analyst Vijay Rakesh lowered his estimates on Micron (MU) even as the company is slated to see "continued execution" through fiscal 2024, as the company said it would boost capital spending, largely for the testing of high-bandwidth memory.
Rakesh, who maintained his buy rating and $82 price target on Micron (MU), said the company should see growth with HBM3E, with pricing between four and six times higher than DDR5 and the company could potentially win some business on Nvidia's (NVDA) GH200, which could be a tailwind.

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