. Micron Gains Despite a Big Guidance Miss - Capital Street FX

Micron Gains Despite a Big Guidance Miss

30 Sep 2022

Micron Technology is trading down 1.94% at 50.01

Shares of Micron Technology (NASDAQ:MU) are up nearly 3% in pre-market Friday despite the chipmaker reporting extremely soft guidance for its first fiscal quarter.

Micron’s FQ4 earnings report has so far proved to be “sell the rumor buy the news” as shares trade higher despite a significant guidance miss. Micron reported an EPS of $1.45 on revenue of $6.64 billion, which compares to analyst estimates of $1.41 per share on revenue of $6.81 billion.

For this quarter, the company is looking for EPS of $0.02 (the midpoint) on revenue of $4.25 billion (the midpoint). The offered guidance compares to the analyst consensus of $0.64 per share on revenue of $5.62 billion. The adjusted gross margin is seen between 24% and 28%, marking another material miss as consensus stood at 33.6%

“We are taking decisive steps to reduce our supply growth including a nearly 50% wafer fab equipment CAPEX cut versus last year, and we expect to emerge from this downcycle well positioned to capitalize on the long-term demand for memory and storage,” the company said in a statement.

A Morgan Stanley analyst took note of another “challenging quarter” and expects the company to post “a small EPS loss in the February quarter.” As a result, the analyst reiterated an Underweight rating and cut the price target to $49 from $56.

On technical fronts, Micron Technology: RSI stood at 41.93 and is currently trading below all MA. So, the SELL position can be taken with the following target and stop-loss:

TRADE SIGNAL – : Micron Technology – SELL: 50.53, TARGET: 48.66, STOP LOSS: 51.33