Micron Technology stock dips as Needham sees risk to November consensus estimates

Micron Technology (NASDAQ:MU ) stock is down over 1% Monday as analysts at Needham & Company expressed concerns over the company's near-term outlook, reducing their price target from $150 to $140.

While maintaining a Buy rating on the stock, analysts flagged potential risks to November consensus estimates due to tempered expectations for the upcoming quarter.

At Needham's 5th Annual Virtual Semiconductor and SemiCap 1x1 Conference, Micron reiterated that bit shipments across DRAM and NAND would be approximately flat quarter-over-quarter in fiscal Q1 2025 (November).

This outlook is more cautious than the company's previous guidance, which had anticipated modest strength in DRAM shipments and a slight increase in NAND for fiscal Q4 2024 (August).

"The bit shipment commentary is incrementally more cautious than guidance given on the F3Q24 earnings call," noted analysts at Needham & Company.

The firm also highlighted that Micron's management is deliberately stepping away from aggressive pricing deals due to moderating client demand, particularly as customers built up inventory earlier in the year.

"As a result, we now believe there is risk to November consensus estimates," analysts stated, adding that this has led to a downward revision in their forward estimates and price target.

Micron's outlook for supply and demand remains optimistic for fiscal year 2025, especially with strong demand for High Bandwidth Memory (HBM).

The company expects non-HBM availability to be more constrained, requiring some inventory shipments to meet anticipated demand.

However, current market weakness in sectors like PC, smartphone, and consumer products, as well as in automotive and industrial segments, continues to be a concern, according to the firm.

Despite these near-term challenges, analysts at Needham remain confident in Micron's long-term prospects but acknowledges the potential for pressure on average selling prices (ASPs) in the coming months due to the company's cautious stance on aggressive pricing.

Source: Investing.com