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Technology Stocks : WDC, NAND, NVM, enterprise storage systems, etc.
SNDK 267.80+11.8%Nov 10 3:59 PM EST
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From: Sam5/27/2020 9:58:46 PM
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slightly OT, on Micron's leap today


Micron Stock Jumps on Improved Outlook for May Quarter -- Barrons.com



Dow Jones Newswires May 27, 2020 06:35:00 PM ET

Micron Technology stock spiked Wednesday after the memory chip company raised its outlook for the quarter ending May 28, citing strong pricing trends for both NAND and DRAM memory chips and improved supply chain conditions.

For the fiscal third quarter, Micron now sees revenue of $5.2 billion to $5.4 billion, with non-GAAP earnings of 75 to 80 cents a share. Two months ago, when the company reported February quarter results, the Micron had been projecting revenue of $4.6 billion to $5.2 billion and non-GAAP profits of 55 cents a share, give or take 15 cents. Street consensus had been $4.9 billion and 56 cents.

The company made the disclosure in an 8-K filing with the Securities and Exchange Commission and in association with a presentation at the 2020 Bernstein Strategic Decisions Conference.

Baird analyst Tristan Gerra points out in a research note that Micron also indicated in the conference session that it expects smartphone sales to resume growth as economies around the world begin to recover. He maintains his Neutral rating on Micron shares.

Raymond James analyst Chris Caso, who maintains a Strong Buy on the stock, theorizes that "it's more likely that near term trends have been driven by supply fears rather than demand trends," though he adds that the data center market in particular remains "resilient."

KeyBanc analyst Weston Twigg responded to the news by repeating his Overweight rating and lifting his price target to $59 from $48. "Strength was noted in both DRAM and NAND, led by work-from-home and e-commerce trends, though overall demand is still negatively impacted by the pandemic," he writes. "Micron's supply has been better than it previously expected, and pricing has been strong." He also highlighted that Micron noted business in the fiscal fourth quarter could be stable with the fiscal third quarter.

Adds Weston: "We view Micron as well-positioned into an eventual recovery, as global memory supply remains constrained and technology demand drivers remain in place."

Micron shares on Wednesday spiked 8%, to $49.45. The stock inched up another 0.5% in after-hours trading.

Write to Eric J. Savitz at eric.savitz@barrons.com
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