Micron's Earnings and Outlook Beat Estimates - Here's the Analyst Reaction

Memory- and storage-solutions major Micron Technology's fiscal-second-quarter earnings and Q3 outlook exceeded analysts' expectations. Analysts at Bank of America, JPMorgan, Deutsche Bank and Wedbush largely praised the report.
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Micron Technology  (MU) - Get Report shares were higher after the company's fiscal-second-quarter results and third-quarter guidance topped expectations.

On Wednesday, analysts from Bank of America, JPMorgan, Wedbush and Deutsche Bank posted bullish notes on the Boise, Idaho, memory and storage solutions company. 

At last check Micron shares were 6% ahead at $45.06.

Bank of America Double Upgrade to Buy From Underperform (PT Affirmed at $60)

Our buy rating is based on (1) low price-to-book (close to the previous trough at near 1 times), (2) margin improvement (May-end quarter) vs. a more serious Covid-19 outbreak (Europe, U.S.), (3) well-managed chip production (no disruption) using new tech (1xnm/1ynm DRAM, 128-layer NAND), and (4) solid financials (net cash) and active shareholder returns using free cash flow (buyback)," analyst Simon Woo wrote. 

JPMorgan Maintains Overweight Rating (PT $65)

"While the full impact of Covid-19, especially on the back half of the year, is not clear, we expect the demand environment to be mixed with continued strength in cloud data center and gaming offset by weaker trends in consumer products such as PCs, smartphones, and autos, at least in the near term," analyst Harlan Sur wrote. 

Webush Maintains Outperform Rating (PT Raised to $65 from $51)

"While we are still positive on Micron, the future has become more opaque. We strongly believe memory pricing contracts have been set at favorable levels for CQ2. As such, while we see management's conservatism as prudent in light of worldwide economic uncertainty, if end-market conditions don't deviate significantly from what we are seeing today, we expect pricing will be better than we have modeled, allowing MU to exceed our estimates," analyst Matt Bryson wrote. 

Deutsche Bank Affirms Buy Rating (Lowers PT to $60 from $65)

"Fiscal-second-quarter results and fiscal-third-quarter guide were strong as MU benefits from improving NAND pricing and stronger demand from data-center and notebook PCs, offsetting weaker smartphone/autos/consumer electronics demand," wrote analyst Sidney Ho. "We have lowered our price target from $65 to $60 to account for potential demand destruction from Covid-19. Even as MU faces ongoing uncertainties, with the stock trading at just 1.3x current book value (compared with a historical average of 1.7x), we believe the risk-reward profile remains favorable and we maintain our buy rating."