Micron Technology, a seasoned player in the computer memory products industry, experienced a less than stellar start on the stock exchange this week. By the end of trading, its shares had fallen nearly 4%, influenced by a price target reduction from an analyst monitoring the company. This decline was significantly sharper than the 0.3% decrease seen in the S&P 500 index.
A $10 Reduction
The analyst responsible for the adjustment was Quinn Bolton from Needham. Before the markets opened on Monday, Bolton revised his price target for Micron from $150 to $140 per share. Despite this change, he retained his buy rating on the stock.
This revision followed Needham’s annual conference focusing on the semiconductor industry. At the event, Micron’s management indicated that shipments of its memory products would remain roughly the same on a sequential basis for the fiscal first quarter of 2025, which begins in September. Initially, Micron had projected that shipments would “strengthen modestly,” as noted by Bolton.
In his latest research note, the analyst mentioned, “Management also stated the company is walking away from near-term deals where pricing is aggressive, and that client demand has moderated given inventory builds earlier this year.”
Optimism for the Current Quarter
This shift in circumstances was the primary reason for the price target adjustment, as Bolton now doubts Micron will meet its consensus analyst estimates. Nonetheless, he and other analysts are generally optimistic about a successful fourth quarter in fiscal 2024. On average, they predict a robust 71% year-over-year revenue increase, reaching $6.84 billion. They also anticipate a return to profitability, projecting a $1.02-per-share profit compared to a $1.07 loss in the same quarter of fiscal 2023.
