|Day's Range||7.95 - 8.43|
Stocks are flirting with record highs, and investors will be monitoring this week's consumer confidence data and Nike earnings.
AutoZone and Conagra will also report earnings this week. Investors will also see economic data on durable goods, new-home sales, and consumer confidence.
Shares of Micron Technology Inc. fell 0.8% in afternoon trading Friday, but outperformed the broader semiconductor sector, after J.P. Morgan analyst Harlan Sur said he was now more bullish on the memory chip maker, citing improving NAND pricing and recovering DRAM pricing. The PHLX Semiconductor Index fell 1.2%. Sur affirmed the overweight rating he's had on the stock for at least the past three years, but raised his price target by 30% to $65 and nearly doubled his fiscal 2020 adjusted earnings-per-share estimate to $2.60 from $1.34. Micron is scheduled to report fiscal fourth-quarter results after the Sept. 26 close. Sur said he expects Micron to report EPS, revenue and gross margin above the midpoint of guidance as NAND pricing during the quarter was better than prior expectations. "Despite macro/trade concerns, the demand environment is improving on inflecting cloud data spending, strong gaming demand and seasonal PC and smartphone demand," Sur wrote in a note to clients. Micron's stock has soared 55.6% year to date, while the chip-sector index has rallied 36.1% and the S&P 500 has gained 19.7%.
Jabil's (JBL) fourth-quarter fiscal 2019 results are expected to benefit from contract wins in healthcare, automotive, cloud and 5G end-markets.
Currently, two points of interest surround Micron Technology (NASDAQ:MU). First, Micron is scheduled to release its fiscal fourth quarter of 2019 earnings report. Recently, Goldman Sachs generated headlines when analysts there declared that MU stock could rise through Micron beating expectations. For the record, consensus estimates peg earnings per share to come in at 48 cents.Source: Charles Knowles / Shutterstock.com Second and more significantly, both political and economic observers are hoping for a truce in the U.S.-China trade war. While the tit-for-tat tariffs have combined with aggressive nationalistic rhetoric, I see a case for at least some resolution. Although I've generally been pessimistic about this conflict, both sides are incentivized to come to the negotiating table. Even a modest truce could spike Micron stock.Of course, such a geopolitical development would be much more meaningful for MU stock than an earnings beat. While I respect Goldman Sachs' confidence, it's not completely out of the question for MU to bring home the goods. In Q4 of the last fiscal year, Micron produced an EPS of $3.53.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 Dividend Stocks to Buy for a Recession The wide gap year-over-year is due to the volatile memory chip market. Before the trade war, robust demand for emerging, lucrative technologies such as the cloud and data centers lifted chip prices. Naturally, semiconductors ramped up production. But when the trade war prolonged beyond what many experts forecasted, it created production pressures. This eventually caused a supply glut, gutting Micron stock due to declining memory chip demand.But prices are picking back up again, which explains the surge in MU stock since late June. What would really seal the deal, though, is a trade agreement. For MU Stock Investors, All Eyes Are on the Trade WarOver the next two days, U.S. and Chinese deputy trade negotiators will engage in face-to-face meetings in Washington. This is the first such meeting in nearly two months. Moreover, organizers hope that this will lay the foundation for high-level talks early next month.While an insider suggested that the current meetings will focus on agriculture, they nevertheless have longer-term implications for Micron stock. That's because the trade war can't end without the two sides hashing out an agreement. Thus, these lower-level talks provide an ideal segue.As I pointed out earlier, I haven't been too hot on a deal materializing soon. Yet some news items suggest we may be getting closer. For example, President Donald Trump proclaimed his own "gesture of goodwill," delaying for two weeks a scheduled 5% lift in tariffs. According to the president, that was to allow China to celebrate their republic's 70th anniversary with one less stressor.More importantly, both sides have hurt significantly from the conflict. In China, growth has grinded down to its slowest rate in decades. Although the trade war isn't the only contributing factor, it plays a major role. Additionally, this slowdown isn't just a granular, esoteric concept: rising wages in China means that Chinese manufacturers may look overseas themselves for cheap labor, hurting the growing middle class.Here in the U.S., Trump may boast about winning this trade war. But the facts suggest a different narrative. For instance, courier service FedEx (NYSE:FDX) complained that the geopolitical dispute has impeded its business.Furthermore, the trade war is hitting home to areas such as the American lobster industry, which has seen disastrous declines. That puts serious pressure on the Trump administration because of the election cycle. By logical deduction, this benefits the bullish narrative for MU stock. What Happens If Talks Fail?While indications suggest that we may have some truce, we won't know until we know. Unfortunately, the current administration has a knack for pulling surprises on us out of the left field. Thus, no substantive truce is also a very real possibility.Seemingly, that bodes poorly for Micron stock. As you know, American semiconductor companies' revenue streams are heavily dependent on overseas demand. Moreover, a failed negotiation could panic Wall Street, tanking cyclical names like MU stock.That said, we can't ignore that Trump's aggressive prosecution of this trade war represents a net long-term tailwind for Micron. Bear in mind that our tech firms are locked in both capitalistic and national security interests. In fact, Micron themselves lists China's "national policy objectives" as a risk factor for MU stock.Plus, Micron themselves have been victims of Chinese corporate espionage. So as painful as this trade war is, it's also in many ways necessary.Of course, not getting a deal may severely impact Micron stock due to panicked sentiment. But if you have a long-term outlook, that volatility would present a discounted opportunity for you. With so much at stake, none of our tech players are letting their foot off the gas.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Stocks to Buy for a Recession * 10 Companies Making Their CEOs Rich * The 7 Best S&P 500 Stocks of 2019 So Far The post Micron Stock Needs a Catalyst and a Trade Truce Can Provide It appeared first on InvestorPlace.
Challenging macroeconomic environment and geopolitical uncertainty are likely to hurt BlackBerry's (BB) bottom line in the second quarter of fiscal 2020.
J.P. Morgan sees a smoother-than-expected road ahead for Micron, with the chipmaker boosted by better-than-expected pricing for its NAND flash memory chips.
Micron stock was trending upward in premarket trading today. The upside came after it got an upgrade from Goldman Sachs just a week before its earnings.
On CNBC's "Mad Money Lightning Round," Jim Cramer said Trade Desk Inc (NASDAQ: TTD ) is oversold, but it's very volatile. Cramer needs to do more work on Zynex Inc. (NASDAQ: ZYXI ). He likes ...
Micron (MU) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
The last 18 months have been hard on the semiconductor industry. Investors sold off chip stocks through the second half of 2018, but a year later the sector is looking better. The turndown was prompted by the US-China trade tensions. That 'trade war' is still simmering, but the two governments are continuing to talk. Investors are less nervous, now that the pattern of tariff-reprisal-delay-negotiate is understood and baked into the affected industries.The current optimism on semiconductor stocks is fueled by the approaching transition to 5G wireless networks. While chip demand is generally low right now, telecom providers are getting ready to switch from 4G to 5G – and that switch will require new chips. Control systems, modems, smartphone devices – companies and customers will see new 5G-compatible models in the next 12 months, and every device will need 5G compatible chips. The chip makers are looking at a resurgence of business next year, and that outlook is starting to lift the chip stocks. Logan Purst, industry analyst from Edward Jones, gave a succinct description of the recent gains in chips: “What’s being priced into these stocks is a rebound next year.”Here we’ve searched for large cap tech stocks and found three upwardly mobile chip stocks in the results. These are companies that have shown solid gains so far this year, as they recover from last year’s malaise. While all will gain from the 5G switchover, their individual paths to success are unique. Micron Technology, Inc.The smallest of the chip makers we’re looking at here, Micron (MU – Get Report) posted $31.8 billion in total sales for 2018, the fifth highest total among the world’s largest semiconductor companies. MU shares are up 59% year-to-date. Much of their momentum has been recent, as the three-month gain is 48%. Indeed we can see that best-performing investors have Very Positive sentiment on MU right now according to TipRanks Smart Portfolio. And analysts expect the recent momentum to help the company’s bottom line in next week’s fiscal Q4 earnings report. EPS is forecast at 43 cents.Longbow analyst Nikolay Todorov sees memory as the catalyst for MU’s future success. He writes, “We are turning more positive on memory fundamentals as we now believe excess inventory will be depleted faster than expected, triggering an improvement in pricing and margin ahead of current expectations.” Todorov’s $66 target suggests a strong upside of 30%.Mark Delaney, from Goldman Sachs, agrees that Micron will benefit from increased memory chip demand during the 5G transition, and that the upcoming earnings report will be the first sign. Anticipating a healthy quarter, he has raised his price target by 5%, to $59, and says that he expects “EPS to be above the mid-point of guidance, as increased bit volumes should help results in the August quarter.” His new price target suggests room for a 17% upside.Overall, MU stock has 15 buy ratings, 6 holds, and 2 sells assigned in the past three months. This gives the stock a consensus rating of Moderate Buy. MU sells for $50.48, and its recent gains have pushed it right up to the average price target of $51.14. Nvidia CorporationNvidia (NVDA – Get Report) is well known to gamers, as the company specialized in the GPUs necessary for a quality gaming experience. The stock, however, took a heavy beating at the end of 2018, reflected in steep quarterly declines reported in February of this year. NVDA shares are turning around, however, and in August reported the third quarter in a row of increasing EPS. Earnings, at 91 cents, beat the 87-cent forecast by 4.4%. Forecasts the November 2019 report show an expected $1.24 per share in earnings. The last time Nvidia reported over $1 in EPS was in November of last year.Share price movement is reflected the recovery in earnings. NVDA is up 34% year-to-date, and as with Micron, the recent momentum is strong. The three-month gain is 17.6%.Writing at the end of August, Benchmark’s 5-star analyst Ruben Roy initiated his coverage of NVDA with a buy rating and a $210 price target. He wrote, “Nvidia is positioned for faster growth relative to semiconductor peers given the increasing use of GPUs across a diverse set of markets.” Roy’s target implies an upside of 16% for NVDA shares.UBS analyst Timothy Arcuri weighed in on Nvidia more recently, also with a buy rating. He sees the company showing steady profitability going forward, saying, “On gaming, we see ~$1.25-1.3B core gaming (ex-Switch) as very do-able for FQ3:20 (Oct) and seasonality should add a big FQ4 tailwind. Additionally, the ~$1.4B/Q normalized revenue is backward looking, and a forward-looking number should likely be as high as ~$1.7-1.8B/Q given annual unit growth.” Arcuri’s price target indicates room for an 8.3% upside to Nvidia’s stock.Nvidia’s analyst consensus is a Moderate Buy, derived from20 buys, 5 holds, and 2 sells set by top analysts in the last three months. The stock’s $187 average price target suggests an upside potential of 4.4% from the current share price of $179. As with Micron, the company’s recent share price gains have pushed the stock up to the price target faster than the analysts could react. Qualcomm, Inc.Holding the seventh spot for revenues among the chip giants, Qualcomm (QCOM – Get Report) posted $16.5 billion in total sales for 2018. The company has shown robust growth year-to-date, with gains of 38%, with a three-month gain of 10.7%. In addition to strong recent momentum, Qualcomm has continued to payout a generous dividend of $2.48 annually. The yield, at 3.14% is more than 50% higher than the average dividend yield in the S&P 500. Qualcomm has had a share of legal ups and downs in recent months. Earlier this year, the company reached a settlement with Apple (AAPL – Get Report) over a patent dispute. As part of the agreement, Apple agreed to pay out a cash settlement of $4.5 billion. In addition, Apple agreed to pay royalties on future use of Qualcomm’s chips. In the FTC v. Qualcomm case, however, the company was handed some bad news – Judge Koh ruled that Qualcomm was violating antitrust laws with its requirement that customer’s sign licensing agreements to use the company’s products. That ruling was stayed by the appellate court in August, giving Qualcomm a reprieve and a chance to prepare new legal arguments.Writing form Canaccord Genuity, 5-star analyst Michael Walkley sees the recent stay as reason for a bullish stance on QCOM. He writes, “The 9th Circuit Court granted a partial stay from Judge Koh’s FTC ruling by placing on hold the provisions requiring Qualcomm to grant patent licenses to rival chip suppliers and end its practice of requiring its chip customers to sign a patent license before purchasing chips.“This stay, along with the recent successful licensing renegotiation with LG Electronics, as evidence Qualcomm’s current licensing business practices could have limited long-term impact from the Judge Koh ruling.”Walkley sets a price target of $87 on QCOM, suggesting a 10% upside to the stock.Like its peers, Qualcomm currently holds a Moderate Buy from the analyst consensus. This is derived from the 6 buys, 9 holds, and 1 sell given the stock in the past 90 days. QCOM shares sell for $78, and, also like its peers, the stock’s recent gains have pushed its share price right to the average price target.Visit TipRanks Analysts’ Top Stocks page, and find out which stock the Street’s top analysts are talking about now.
Should investors consider buying Micron (MU) stock with the chipmaker set to report its quarterly financial results on Thursday, September 26?
Goldman Sachs analyst Mark Delaney reaffirmed his Buy rating for Micron stock, predicting solid fiscal fourth-quarter results from the chip maker.
San Jose-based Western Digital Corp. will maintain Kazan Networks’ Roseville operations following its recent purchase.
Micron (MU) increased its capital spending from $3.1 billion in fiscal 2014 to $8.8 billion in fiscal 2018 and increased its ROI from 16.8% to 42.4%.
From June 20 to September 16, memory stocks Micron and Western Digital rose 47% and 59%, respectively. Bullish analysts expect these memory stocks to rise.
Malaysia has set up a panel to fast-track investments as it seeks to woo businesses affected by the U.S.-China trade dispute and it approved more than $500 million in new proposals this month, a government minister said. An increasing number of U.S. and Chinese businesses have been moving manufacturing out of China to escape tit-for-tat tariffs imposed on each other's products. Malaysia's new National Committee on Investment I (NCII) aims to encourage investment in Southeast Asia's third-biggest economy and it approved investments worth 2.2 billion ringgit ($526 million) in its first meeting, the minister said.