Micron has been banned from selling chips in China, a move that the company now expects to have a larger-than-first-anticipated effect on revenue. A new chipmaking plant in Japan and a new, just-announced testing facility in India have taken some of the sting out, but neither is expected quickly make up for the 11% of revenues that Micron realized from its sales in China.
Of 36 analysts covering the stock, 24 have a Buy or Strong Buy rating, and another nine rate the stock a Hold. At a share price of around $65.50, the upside potential based on a median price target of $72.00 is 14.5%. At the high target of $100.00, upside potential is 52.7%.
Fiscal third-quarter revenue is forecast at $3.68 billion, down 0.5% sequentially and 57.4% lower year over year. Analysts expect an adjusted loss per share of $1.57, better than the $1.91 loss in the prior quarter and well below EPS of $2.59 in the third fiscal quarter of 2022. For the full 2023 fiscal year ending in August, revenue is forecast at $15.37 billion, down 50%, and the full-year loss is forecast at $4.60, compared to last year’s EPS of $8.35.
Micron stock trades at 109.9 times estimated 2024 earnings of $0.60 and 12.5 times estimated 2025 earnings of $5.26 per share. Its 52-week range is $48.43 to $74.77, and MIcron pays an annual dividend of $0.46 (yield of 0.70%). Total return over the past 12 months was 12.93%.
Paychex
Paychex Inc. (NASDAQ: PAYX) is the country’s second-largest integrated human resources outsourcer of staffing and employment services such as payroll and insurance. The stock has dropped about 9.6% from its share price over the past 12 months, including an increase of 5.5% in June. The company reports results before markets open on Thursday.
Paychex has more than doubled its EPS total over the past three years and has raised its dividend by around 43.5% in the same period. Free cash flow for the past four quarters totals $1.5 billion ($4.15 per share), and with more than 70% of its stock owned by institutional investors, it would not be a big surprise if Paychex announced a share buyback in the near term.
Of 20 analysts covering the stock, 12 have a Hold rating and four rateit at a Buy or Strong Buy. At a share price of around $110.70, the upside potential based on a median price target of $120.00 is 8.4%. The high price target of $140.00 implies an upside of about 26.5% to the current price.
Analysts expect revenue for the fourth quarter of fiscal 2023 to come in at $1.22 billion, down 11.5% sequentially but 7.8% higher year over year. Adjusted EPS are expected to come in at $0.97, down 24.9% sequentially and up 19.8% year over year. For the full fiscal year that ended in May, analysts forecast EPS of $4.28, up 13.7%, and revenue of $4.99 billion, up 8.3%.
Paychex stock trades at 25.8 times expected 2023 EPS, 24.1 times estimated 2024 earnings of $4.60 and 22.3 times estimated 2025 earnings of $4.96 per share. It 52-week range is $104.09 to $139.47. Paychex pays an annual dividend of $3.56 (yield of 3.22%). Total shareholder return for the past 12 months was negative 7.06%.
Originally published at 24/7 Wall St.
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