Micron’s Post-Earnings Estimate Hikes May Lag Previous Quarters, Flags Morgan Stanley

• Micron is scheduled to report results on Sept. 30 after the market closes.
• Morgan Stanley maintained an ‘Overweight’ rating on MU stock with a price target of $1,200.
• Micron has guided for fiscal fourth-quarter revenue of $50 billion.

Micron Technology Inc. (MU) could see another round of earnings estimate increases after reporting fiscal fourth-quarter results Wednesday, although the revisions may not match the magnitude seen in recent quarters, according to Morgan Stanley.

Near-term conditions are “still very good,” with strong demand and rising pricing evident, the firm said in an earnings preview cited by TheFly. Morgan Stanley maintained its ‘Overweight’ rating on the stock with a price target of $1,200.

At the time of writing, MU stock was trading around 3% lower. The company is scheduled to report results on Sept. 30 after the market closes.

Morgan Stanley Focuses On Memory Cycle Duration

According to TheFly, Morgan Stanley said it remains positive on Micron and expects earnings expectations to move higher after Wednesday’s print, but “less so than prior quarters.”

The firm also believes the strength in memory will prove durable, while acknowledging that the question of how long the current cycle lasts is harder to settle immediately.

“Duration debates take longer to pay off, as there’s no real way to prove that near term,” Morgan Stanley said.

Micron has guided for fiscal fourth-quarter (Q4) revenue of $50 billion, plus or minus $1 billion, alongside an approximately 86% gross margin and non-GAAP diluted earnings per share of $31, plus or minus $1.

The company reported fiscal third-quarter (Q3) revenue of $41.46 billion, meaning its fourth-quarter guidance already calls for another sequential increase in sales.

Is Memory Boom Nearing A Peak?

The duration question has become increasingly important after the sharp run-up in memory-industry earnings.

Barron’s noted that skeptics could argue memory-chip companies typically appear inexpensive near the peak of their cyclical earnings, while adding that little evidence so far suggests the current memory boom has peaked.

The publication cited Synovus Trust senior portfolio manager Daniel Morgan, who said dynamic random access memory (DRAM) and NAND supply should remain tight through Micron’s fiscal 2027, with incremental supply moving toward balance in fiscal 2028.

Another development putting the memory industry in focus is SK Hynix’s (SKHY) U.S.-based Solidigm unit reportedly considering an initial public offering (IPO). Reuters reported Friday that an offering could value the NAND storage business at up to $150 billion and raise about $15 billion.

For Micron, Wednesday’s report will provide another look at current demand and pricing conditions. Morgan Stanley’s view going into the print is clear: it still expects estimates to rise afterward, just not by as much as investors have seen following recent quarters.

Retail Sentiment Around MU Stock

On Stocktwits, retail investor sentiment around MU stock remained in ‘bullish’ territory.

So far this year, MU stock price has more than tripled, surging over 230%. In comparison, the Global X AI Semiconductor & Quantum ETF (CHPX) and the Roundhill Memory ETF (DRAM), which hold the stock, have risen around 75% and 112%, respectively, over the same period.

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