10:44 AM EDT, 09/25/2024 (MT Newswires) -- Micron Technology's ( MU ) forward estimates have been cut ahead of its Q4 results due to a challenging near-term market driven by memory inventory reductions at PC and handset original equipment manufacturers, Wedbush said in a Wednesday note.

The company is set to report its fiscal Q4 results later today.

"We believe [Q3] contract pricing was set relatively favorably for Dynamic Random Access Memory, or DRAM, and NAND by the early August time frame, a result that modestly improved our FQ4 DRAM pricing estimates," Wedbush said. However, the Q4 outlook worsened due to inventory reductions and soft demand, leading to an oversupply, it added.

DRAM pricing is now expected to be flat or slightly down, with NAND expected to decline in the mid-single digits, prompting Wedbush to lower its estimates for Q1 and fiscal 2025, the note said, adding that it expects inventories to normalize and AI demand to stay strong, leading to a better 2025.

"[G]iven this outlook, we still see room for significant earnings expansion and in turn a recovery for [Micron's] stock and as such we are retaining our OUTPERFORM rating," Wedbush said.

Wedbush said it has reduced the company's price target to $140 from $170, "in light of our reduced forward EPS estimates."

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