Micron likely to report in-line Q2, offer strong guidance, J.P. Morgan says
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Micron Technology (NASDAQ:MU) is set to report second-quarter results after the close of trading and J.P. Morgan believes the dynamic random access memory provider will report in-line results, but guidance is likely to top estimates.
Analyst Harlan Sur, who rates Micron overweight with a $115 price target, noted that cloud, gaming, auto and industrial are likely to help the company and offset any weakness from the PC market and Chinese smartphone market.
"Going into [the May quarter] we see DRAM pricing down 2-4% [quarter-over-quarter] as strength in cloud/auto/industrial/gaming is offset by weak smartphone/PC, followed by pricing improvements as we move into the [second-half] as accelerating strength in the aforementioned growth verticals (cloud/enterprise) is augmented by improving PC production/mix fundamentals, new iPhone refresh and slower supply growth due to equipment shipment delays," Sur wrote in a note to clients.
Micron (MU) shares gained slightly more than 0.5% to $80.42 in premarket trading.
Sur added that second-quarter revenue should come in at $7.5 billion and earnings should be $1.95 per share. 
A consensus of Wall Street analysts expects Micron (MU) to earn $1.98 per share on $7.53 billion in revenue for the second quarter.
In addition, Sur noted that NAND pricing is likely to be up in the mid single-digits in the May quarter, as supply remains tight due to the Western Digital (WDC) contamination at its Japanese plant.
"Bottom line, we see sustained improvement in DRAM and NAND fundamentals for the remainder of the year and expect [2022] numbers to be revised higher post the call with [Micron] earnings power of $13-$14 exiting CY22 (Street at $12)," Sur added. 
Last week, Micron's (MU) Chief Executive Sanjay Mehrotra testified in front of Congress to ask for more government support for the domestic semiconductor industry, though Bank of America said it would not be a "silver bullet."