Analysts Are Still Bullish On Micron Technology (MU) Despite Poor Results
Micron Technology shares were down by 2% after the company's announcement of job cuts and weak quarterly earnings.
Overall, Micron Technology posted a loss per share equal to $0.04 with a revenue of around $4.09 billion only. The market's expectations were a $0.01 loss per share only with $4.15 billion in sales. According to experts, the chipmaker is facing a slowdown, with its clash flow already down by 76% on a yearly basis.
Similarly, the revenue of Micron Technology was also down by 47% on a yearly basis, with a gross margin (adjusted) of 22.9% only. Earlier, the adjusted gross margin forecast was 47% on a YoY basis which tells us that the fundamental picture of Micron Technology is not looking good.
Micron Technology Can Navigate The Current Environment
According to the CEO of Micron Technology, the company's EPS and revenue were close to the guidance ranges. He also said that the company's manufacturing, technology, and financial situation are strong and will help it to navigate the current landscape.
The company also has an announcement that it will be announcing a 10% job cut as well as a salary cut for its executive employees.
According to analysts from Morgan Stanley, the price target for Micron is set to $46 after the recent results. They also mentioned how the results give us a hint about the difference between supply & demand. They believe that the oversupply problem will continue to plague Micron technology even in CY23.
As for Goldman Sachs, they are still bullish on Micron stock and have maintained their buy rating on the stock. They believe that the company will have to take some constructive actions on the supply side.
Similarly, the analysts from KeyBanc believe that there is still a good risk/reward ratio in the Micron stock. In addition, they also pointed toward good growth in the sector.
For the year 2022, Micron Technology is already down by 45%, which is similar to the rest of the tech sector. So on that front, the chipmaker isn't alone, as poor revenue is affecting all the major tech companies.