Micron loses ground as job cuts, outlook hit investors' sentiment
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Micron Technology (NASDAQ:MU) shares fell almost 5% in pre-market trading Thursday as Wall Street assessed the company's plans to cut 10% of its workforce amid an ongoing decline in demand for its memory chip products.
Late Wednesday, Micron (MU) said it would trim its employee rolls as part of a plan to cut expenses and ride out the market weakness in the hopes that sales will begin to turn around in the second half of 2023. Along with its belt-tightening, Micron (MU) said it expects to lose between 52 cents and 72 cents a share, excluding one-time items, on revenue in a range of $3.6B to $4B for its fiscal second quarter.
Micron (MU) also reported fiscal first-quarter results that included a loss of 4 cents a share, excluding one-time items, on revenue of $4.09B. Wall Street analysts had expected Micron (MU) to lose 2 cents a share on $4.14B in sales for the quarter.
Chief Executive Sanjay Mehrotra admitted that Micron (MU) faced a series of "challenging conditions during the quarter" including customers putting off orders and a bigger-than-expected build up of product inventories.
"In our view, the significant debate is less about the magnitude of near term losses," said Morgan Stanley analyst Joseph Moore, in a research note. "[It's] more about the time frame of recovery." 
Moore, who has an underweight rating on Micron (MU) stock, trimmed his price target to $46 a share from $49. Moore said he expects Micron (MU) to be dealing with oversupply issues through all of 2023, and that it was "a positive that the management team has a cautious view" of its business over the next year. 
J.P. Morgan analyst Harlan Sur was a little more positive on Micron (MU) going forward, and left his overweight rating and $65-a-share stock-price target unchanged. Sur said that "from a stock perspective" there is "very little downside" to Micron (MU), as its shares are down by 45% this year.
Sur added that he believes the steps being taken by Mehrotra and Micron (MU) suggest "the [management] team is doing everything to control what it can to maintain industry supply discipline."
Wall Street analysts currently have a consensus rating of buy on Micron's (MU) stock, while Seeking Alpha authors give the shares a more-modest rating of hold. Seeking Alpha's Quant System, which regularly outperforms the stock market, also has a consensus hold rating on Micron's (MU) stock.