EARNINGS PRIMER: Micron (MU) earnings due 30th September at 21:00BST/16:00EDT

Q4 2026 (USD): EPS (exp. 31.71), Revenue (exp. 51.35bln), Next Qtr. EPS (exp. 35.82), Next Qtr. Rev. (exp. 57.74bln), Current FY EPS (exp. 73.71), Current FY Rev. (exp. 130.13bln), Next FY EPS (exp. 161.09), Next FY Rev. (exp. 249.91bln)

SUMMARY:

• When memory-maker Micron reports its much-anticipated earnings, they are widely expected to deliver impressive results, given the strength of the AI boom.
• The Street and investors are bracing for beats and raises across the board, with anything less likely resulting in some sharp downside in share price.
• The co. heads into earnings with analysts expecting tight memory supply, stronger pricing and AI-driven demand to support earnings, margins and guidance.
• However, JPMorgan believes investors need to listen out for a surprise from Micron execs in the form of a huge new capital returns programme, perhaps through a stock buyback or dividend hike.

SELL-SIDE INTO EARNINGS:

• UBS reiterate 'Buy' rating and PT of USD 1,625; while the stock remains in a battleground between momentum and duration, fundamentals continue to improve with UBS's latest round of checks pointing to a gap between supply and demand that continues to widen into CY27.
• RBC reiterate 'Outperform' rating and PT of USD 1,500; Cycle has duration even if pricing momentum moderates. While price appreciation is moderating after significant YTD gains, RBC's Asia supply chain conversations point to 80-100% HBM price increases for 2027, which should remain a tailwind to blended DRAM ASPs.
• Stifel reiterate 'Buy' rating and PT of USD 1,500; expects MU to report/guide upside to estimates for this quarter, and next, it anticipates a more measured rate-of-upside than in recent quarters. Adds it reflects the phase-in of more rev. from supply agreements, and near-term bit shipment constraints, although believes the durability of this memory upcycle continues to be under-appreciated.
• Citi raises PT to USD 1,300 (prev. USD 1,150); lifts its Aug/NOV-Q estimates on better-than-expected blended DRAM market pricing Applied to the remaining ~60% non-LTA contracted DRAM bits.
• Goldman Sachs expect another strong quarter as tight conditions persist, with capital returns in focus; expects persistent supply/demand tightness to drive another strong Q with upside to the St. and guidance. Investor positioning is positively biased given persistent tightness in DRAM and NAND, set against some investor concerns over longer-term supply additions from competitors particularly in China.
• Bank of America says FY27 GM near mid-80s% is key to sustaining USD 150-200 FY27 EPS and justifying >40% potential upside. Buybacks could resume December 9th and trailing FCF supports retiring 8-10% of shares, signaling cycle confidence. BofA adds, ignore SCA noise; memory derating reflects H2 27 capacity fears, not contracts, despite strong pricing trends.
• Desks note, one of the things to keep an eye on is that those locked-in contracts cap some of the upside if memory prices keep climbing, and rising costs and spending could nibble at margins. But with tightness in supply now expected to run past 2027, the setup looks about as strong as it gets.

EXPECTATIONS:

• For Q4, adj. EPS is seen at USD 31.71 and revenue at USD 51.35bln. Gross margin seen at 86%.
• For the next quarter, profit and revenue are projected at USD 35.82 and USD 57.74bln, respectively, with GM at 87%.
• In the last quarter earnings call, Micron said it expects Q4 adj. EPS at USD 31.00 and revenue of USD 50.0bln, with Q4 capex of 10bln.

POST-LAST EARNINGS:

• Shares surged after the memory maker beat expectations and issued stronger guidance in FQ3, benefiting from surging AI-driven demand, rising memory prices and long-term customer agreements. In its report, said revenue more than quadrupled from USD 9.3bln amid surging AI-driven memory demand and tight supply. Moreover, last Q revenue hit a record USD 41.5bln, GMs climbed to c. 85%, and FCF was also a record at USD 18.3bln. In addition, announced 16 long-term customer agreements they locked down, worth c. USD 100bln in future orders with USD 22bln already committed.
• Regarding the supply, MU said to expect tight conditions to persist beyond CY27 due to AI-driven demand across all segments. Currently do not have line of sight as to when memory supply will be able to catch up with increasing demand.
• Following the last Micron earnings, which was a blowout report, US indices sunk, as hyperscalers saw heavy weakness, with AMZN, GOOGL, META, and MSFT all notably lower. One of themes to still monitor, is that the whole AI/tech space is unlikely to benefit all together going forward, as while the blowout Micron report was very good for them and memory names, it hits other sub-sectors within the industry as they'll have to spend more, as shown by Apple having to hike prices back then.