NEW YORK (TheStreet) -- Micron Technology (MU) - Get Report stock is declining by 1.05% to $10.27 in mid-morning trading on Tuesday, following a ratings downgrade to "underperform" from "hold" at Needham, ahead of the chipmaker's second quarter earnings due out after tomorrow's market close.
Analysts are expecting Micron to report a loss of 8 cents per share on revenue of $3.05 billion for the quarter, compared with earnings of 81 cents per share on revenue of $4.17 billion for the year-ago period.
Wall Street's expectations for the company's upcoming financial results are too high, as weakness in personal computers continues to weigh on average selling price, Needham wrote in a note, Barron's reports. There might also be headwinds to NAND pricing.
"We continue to see a weak PC market adversely affecting DRAM pricing, and checks pointing to vulnerabilities in mobile DRAM," the firm explained. "We believe a similar dynamic could be developing in NAND."
Additionally, Samsung appears to remain "well ahead" of Micron in 3D NAND manufacturing, and will likely drive pricing down to ultimately negate any of Micron's eventual profitability progress, Needham continued.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Micron's strengths such as its reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures are countered by weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.
You can view the full analysis from the report here: MU
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.