Micron Stock Plunges After Company Cuts Outlook, Analysts Raise Concerns
Key Takeaways
Micron Technology (
MU
) shares sank Thursday after the chipmaker warned about softness in consumer-oriented markets and some analysts lowered their outlook for the company.
Micron said late Wednesday that it sees current-quarter
revenue
of about $7.9 billion, well below estimates. The company pointed to a weaker-than-expected PC replacement cycle, and slowing demand for its products in the auto and
industrial sector
.
The news, along with bearish takes by a range of Wall Street analysts, pulled the stock down 16% recently to below $88—around their lowest level since September—making the stock one of the top decliners in the S&P 500 in recent trading.
Bank of America Securities downgraded the stock to “neutral” from “buy,” and lowered its
price target
from to $110 from $125, below the Visible Alpha average around $129. The BofA analysts said that
Micron
‘s “weakness in PC and phone markets are putting downward pressure on memory pricing,” especially for its NAND flash-memory
semiconductor
. They added they expect
gross margin
to “stay weak in Q2 and even Q3.”
Citi maintained its “buy” rating and price target of $150 on Thursday, but lowered its own estimates for profit and sales over the next two years. Citi now sees fiscal-year 2025
earnings per share (EPS)
of $6.75 and revenue of $34.6 billion, compared with a previous forecast of $8.27 and $37.7 billion, respectively.
For 2026, Citi anticipates EPS of $13.31 and revenue at $45.0 billion. Its prior forecast was for an EPS of $15.49 and revenue of $45.5 billion.
Wedbush Securities wrote in a note to clients Thursday that they see “brighter days ahead for Micron.” They argued that the headwinds facing the company are only “temporal.” Wedbush held its “outperform” rating and $125 price target.
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