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The key driver for the price target cuts is Micron’s sober outlook going forward, with analysts at Wolfe noting that the company’s management has expressed slight caution about its near-term outlook.
Shares of Micron Technology Inc. (MU) gained more than 7% in Wednesday’s regular trading session and extended gains during after-market hours despite price target cuts at Wolfe Research and Wells Fargo.
According to The Fly, Wolfe cut its price target for the Micron stock to $150 from $175 while maintaining an ‘Outperform’ rating. This implies a 57% upside from Wednesday’s close.
On the other hand, Wells Fargo trimmed its price target for Wolfe to $130 from $140, with an ‘Overweight’ rating. This implies a 36% upside from Wednesday’s close.
The key driver for the price target cuts is Micron’s sober outlook going forward. Analysts at Wolfe underscored that the company’s management had expressed slight caution, citing greater pricing pressures and an unfavorable product mix dampening the near-term outlook.
Wells Fargo underscored that Micron has trimmed its third-quarter gross margin expectations on account of normalizing investors levels in the end consumer market.
The brokerage added that while Micron offers a very compelling risk-reward profile, it cut the Q2 EPS estimate to $1.42 from $1.46 and Q3 EPS to $1.30 from $1.63.
Micron reported an EPS of $1.79 in Q1, and it is scheduled to post its Q2 results on Mar. 20 during the after-market hours.
On Stocktwits, retail sentiment around the Micron stock remained in the ‘bearish’ (38/100) territory, while message volumes were at ‘normal’ levels.
One user posted a technical analysis of the Micron stock, noting that they will buy it when it is in the high-80s zone.
Micron’s stock has surged nearly 14% year-to-date, but its one-year returns are far less stellar, with gains of just 1.6%.
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