Micron shares surge after stronger-than-expected chip outlook

  • Micron increased its fiscal second-quarter 2018 revenue guidance on Monday.
  • "We are raising our estimates to reflect the preannouncement, and we're upgrading to Overweight as valuation and long-term trends are too compelling to ignore," KeyBanc Capital Markets semiconductor analyst writes.
MICRON TECH-M&A/TSINGHUAUNIGROUP
Kai Pfaffenbach | Reuters

There is actually some good news in the market and the chip industry.

Amid the focus on the market's recent volatility, Micron announced better-than-expected guidance on Monday.

The memory chipmaker raised its fiscal second-quarter 2018 revenue forecast range to $7.2 billion to $7.35 billion from its previous target of $6.8 billion to $7.2 billion. Micron also increased its earning per share guidance for the quarter to $2.70 to $2.75 from $2.51 to $2.65.

Micron shares closed up 7.5 percent Tuesday.

The company also announced Monday it has appointed David Zinsner as its chief financial officer, effective Feb. 19, replacing Ernie Maddock.

KeyBanc Capital Markets raised its rating to overweight from sector weight for Micron shares, following the announcements.

"Micron preannounced F2Q (Feb.) positively amid strong DRAM pricing," semiconductor analyst Weston Twigg wrote in a note to clients Monday. "We are raising our estimates to reflect the preannouncement, and we're upgrading to Overweight as valuation and long-term trends are too compelling to ignore."

Micron will report its earnings results on March 22.