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Playing Micron Technology’s (MU) Earnings

Volatility on Micron Technology is high and its true value will emerge just after the company reports quarterly results. Markets already know MU will crush expectations. So is the stock a buy at $28-$29 and a sell at $32-$34?


Hold MU Through ER

MU stock should trade above current levels if the ER is above expectations and the stock doesn’t rally much ahead of results. Yet, after MU stock rallied from $27-$28 and through to close to $32, more upside after the report is hardly a sure thing.

Sell or Stay on Sidelines

MU could go up or down after the results. Instead of guessing, wait for the ER first, then buy.


Trade Weekly Options

The elevated volatility gives options trades plenty of time decay to work with. 

Related: LRCX, AMAT, CY, INTC, AMD all have similar potential value like MU stock. AMD has a multi-product refresh but revenue does not accelerate until 2018. INTC just released the Core i9.

  • 1 1 correctly predicted forecast
    Joe Smith
    loaded up on MU today at the DIP. Momentum is starting to build.
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  • 2 2 correctly predicted forecasts
    Chris
    http://thefly.com/landingPageNews.php?id=2571679&headline=MU-Micron-price-target-raised-to--from--at-Barclays
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  • 2 2 correctly predicted forecasts
    Chris
    An interesting article in Barrons today... notable for the take on Memory supply and other things. Titled Investors' Soapbox: Intel, AMD Face Near-Term Supply Headwinds -- Barrons.com

    "(The opinions contained in Investors' Soapbox in no way represent those of Barrons.com or Dow Jones & Company, Inc. The opinions expressed are those of the newsletter's writer(s) or analysts at research firms. Some of the research firms have provided, or hope to provide, investment-banking or other services to the companies being analyzed.)
    MKM Partners
    We recently met with roughly 30 companies that participate in the Asian technology supply chain.
    Overall, feedback was mixed with comments on the Chinese smartphone market more negative than we had expected, PC and server commentary mixed relative to our expectations and memory market commentary better than we had expected.
    Apple (ticker: AAPL) iPhone supply-chain feedback was in line with our expectations with supply chain participants broadly expecting delayed shipments for the OLED model. We would note, though, a wide range of forecasts for second-half OLED model build plans. Specific to our semiconductor coverage universe, our meeting takeaways left us more positive on Broadcom (AVGO), Micron Technology (MU) and Cavium (CAVM) and less positive in the near-term on Advanced Micro Devices (AMD), Intel (INTC) and Qorvo (QRVO).
    Memory market trends remain broadly positive. Despite continuing weakness in the Chinese smartphone market, DRAM pricing trends remain positive given continued strong demand from the server market. As some allocation of DRAM moves to servers from mobile, industry participants expect continued price increases in the third quarter, which is better than we expected. Specifically, our conversations suggest expectations for mobile DRAM pricing increases of roughly 5% in the third quarter and low-single-digit server and PC DRAM pricing increases. This would yield blended DRAM pricing increases of between 5%-10% for the third quarter. The low end of this range would support meaningful upside to current Micron November quarter consensus estimates, in our view.
    With respect to NAND, while industry participants expect improving supply during the second half as Samsung ramps 64 layer 3D NAND, demand continues to run above supply driven by solid-state-drive (SSD) demand. Consequently, despite improving supply later this year, feedback from our meetings indicate expectations for a stable pricing environment for NAND through year end, which is above our current expectations for low-to-mid single digit average sales price (ASP) declines. Supply-side commentary from our discussions with Samsung and SK Hynix were largely in line with expectations.
    Chinese smartphone demand trends remain sluggish. Largely due to lower carrier subsidies this year versus last, the Chinese smartphone demand trends remained sluggish through June. Oppo, which recently released its latest 5.5-inch high- end R11 handset, appears to have cut its third-quarter unit forecast shortly after the launch. For the full year, our checks indicate low expectations for the top four handset vendors, Huawei , Oppo, Vivo and Xiaomi , to reach full-year unit targets. Our discussions also indicate that component inventory levels remain elevated. We think Qorvo is modestly at risk here, in the near term, given forecast cuts at Oppo. Longer term, we continue to view the radio-frequency (RF) space positively as content increases are expected to continue.
    -- Ruben Roy "
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  • 1 1 correctly predicted forecast
    Joe Smith
    expect gap upto 36 and sell-off back to eod support.
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