Micron rises even as Barclays says weaker pricing may set up Q3 miss, weak guidance
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Micron Technology (NASDAQ:MU) shares rose on Tuesday even as investment firm Barclays said weak pricing in both the dynamic random access memory and NAND markets could cause the company to miss third-quarter estimates and provide weak guidance.
Analyst Tom OâMalley, who rates Micron (MU) shares overweight, lowered his price target to $75 from $105, noting that consumer markets are weakening, which has played a significant role in the weakness of DRAM and NAND. NAND spot pricing has fallen 8% over the past quarter, while DRAM is down 12%.
Micron (MU) shares rose more than 0.5% to $59.11 in premarket trading on Tuesday.
OâMalley conceded that there have not been any indications of weakness in the data center just yet, but there is the possibility for that to happen later this year.
The analyst also noted that Micron (MU) has continued to lead the industry in cost declines on the front end, but continued issues with the supply chain, such as increased costs for freight, are likely to "weigh on the back end" and make cost declines "more difficult."
Micron (MU) is scheduled to report third-quarter earnings after the close of trading on Thursday and analysts expect the company to earn $2.45 per share on $8.66B in sales.
Last week, investment firm Wells Fargo cut Micron's (MU) estimates ahead of the semiconductor company's third-quarter results.