Micron Technology reported surprisingly weak quarterly outcomes, elevating concern amongst Wall Street analysts. Shares of Micron declined 3% in Thursday premarket buying and selling after the semiconductor firm missed earnings and income expectations in its most up-to-date quarter. Micron reported a lack of 4 cents per share on income of $4.09 billion. Analysts polled by Refinitiv have been forecasting a lack of 1 cent per share on income of $4.11 billion. In addition, Micron mentioned it could scale back its workforce by about 10% in 2023 , in addition to droop bonuses, to take care of “challenging industry conditions.” Other semiconductor companies have lately mentioned they might lay off employees or impose a hiring freeze. On Wall Street, many analysts say the inventory stays a purchase, although they anticipate the semiconductor identify will nonetheless face challenges forward. Others pared again their expectations for the already-beleaguered semiconductor identify has additional to fall. Shares of Micron are down 45% in 2022. JPMorgan’s Harlan Sur reiterated an chubby ranking on the inventory, saying shares have “little downside” after their underperformance this yr. His $65 value goal implies the inventory can leap greater than 26%. “We believe the stock continues to move in a positive direction as we head into 2023 as the market starts to discount revenue/pricing recovery in the 2H in response to the aggressive supply cuts and an improved demand environment,” Sur wrote in a Thursday observe. “We would be accumulating the stock on pull-backs.” Barclays analyst Tom O’Malley lowered his demand and spending outlook, saying a restoration in semiconductor producers could take longer than anticipated and lengthen into 2024. Still, he maintains an chubby ranking on the inventory. “[The] company continues to play the role of a rational supplier, cutting wafer starts, opex, and now further reducing capex but it’s clear this cycle is deeper and more prolonged than any since the tech bubble,” O’Malley wrote in a Wednesday observe. “[Despite] the weaker numbers our downside BV of $40 remains unchanged with the stock attractive in the high 40’s,” O’Malley added. Meanwhile, Deutsche Bank’s Sidney Ho lowered calendar yr 2023 earnings per share estimates, saying that the near-term pains proceed to worsen for Micron. The analyst reiterated a maintain ranking, in addition to a $55 value goal that suggests 7% upside from Wednesday’s closing value. “With the stock currently trading at ~1.2x book value and our view that book value will likely decline 5-10% over the next few quarters, we believe risk-reward at the current level is balanced and we wait for a better entry point,” Ho wrote. To make certain, some analysts noticed the mounting losses as a motive to exit the inventory. Morgan Stanley’s Joseph Moore maintained an underweight ranking on Micron. He lowered his value goal to $46, down from $49, implying shares may fall one other 10% from Wednesday’s closing value. “As previewed, losses in February will be higher than expectations, with $600mm in losses; it’s a mixed outlook, as bits are recovering slightly faster than we expected, but prices remain challenging,” Moore wrote in a Thursday observe. “In our view the significant debate is less about the magnitude of near term losses – at least now that the stock has weathered the narrative challenge of losses – and more about the time frame for recovery. While bulls seem to forecast improvement in the next couple of quarters, we don’t see it that way, and neither does management who is calling for challenging economic conditions through CY23,” Moore added. —CNBC’s Michael Bloom contributed to this report.
