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Micron Technology Placed on Citi Negative Catalyst Watch

Citi expects Micron to report results below guidance and assigned it to negative catalyst watch.
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A Citi analyst on Monday opened a negative catalyst watch on shares of Micron Technology  (MU) - Get Micron Technology, Inc. Report, a day before the semiconductor company is scheduled to report fourth-quarter earnings.

Shares of the Boise, Idaho, company at last check were up 0.4% at $49.31.

Analyst Christopher Danely, who has a sell rating on the shares with a $35 price target, said he expected Micron to report sales below guidance of $6 billion but in line with his $5.5 billion estimate due to what he called a double dip in DRAM.

The analyst also expects the stock to trade lower on the report and would be more constructive on the stock in the mid $30s, according to The Fly.

Last week, Founder Jim Cramer said on CNBC that “Micron’s core DRAM business could be saved by their disk drive business, but I don’t see the stock roaring unless management says they see tightness coming in DRAMs.” 

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“At these levels, I’d be willing to bet they do just that,” he said.

In June, Micron said it expected fiscal fourth-quarter earnings of 78 cents to 98 cents a share, or an adjusted 95 cents to $1.15 a share. Revenue should come in at $5.75 billion to $6.25 billion.

Analysts surveyed by FactSet were expecting the company to earn 71 cents a share, or an adjusted 79 cents, on revenue of $5.46 billion.

The company reported fiscal-third-quarter earnings of 71 cents a share, or an adjusted 82 cents, compared with 74 cents in the year-earlier quarter. Revenue climbed 14% to $5.44 billion from $4.79 billion. 

FactSet had called for net income of 64 cents a share, or an adjusted 75 cents, on revenue of $5.27 billion.