Micron Technology Inc. (NASDAQ: MU) reported its earnings Tuesday after the U.S. markets closed, and analysts are weighing in Wednesday on what they think about the semiconductor giant. Earnings per share (EPS) were reported at $0.97 and revenue at $4.57 billion, versus Thomson Reuters consensus estimates of $0.92 in EPS and $4.62 billion in revenue.

Credit Suisse noted that Micron was seasonally weak. DRAM is the key driver of this thesis and seemingly responsible for the revenue shortfall this quarter. The brokerage firm reduced its EPS estimates for the February quarter from $0.83 to $0.73, despite being past the seasonal trough quarter. The current year EPS estimate remains unchanged at $3.69. Micron has yet to act on the $1 billion buyback authorization. The structural thesis is still intact, with a slowing supply and increasing content that will drive earnings visibility and support an EPS potential of $5 or more. Credit Suisse has an Outperform rating for Micron, with a price target of $50.

Merrill Lynch believes that DRAM was a key contributor to Micron’s earnings, while NAND chips remained resilient to spot weakness in operating margin, expected to be about 10%. Guidance for the second quarter was muted, or conservative, on lower bit growth and the average selling price was not a concern. Merrill Lynch revised its EPS estimate only slightly, assuming an operating profit of over $1 billion quarterly. For 2015, EPS are expected to decrease by 1% and for the full year 2016 are expected to be up 5%. According to the brokerage firm, the current share price only shows a price-to-earnings (P/E) ratio of 9 to 10. Overall, Merrill Lynch considers Micron to be one of its top buys, with a Buy rating and a $45 price target.

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Wells Fargo maintained an Underperform rating for Micron with a valuation range of $22 to $28, which is based on a 9- to 11-times multiple of its fiscal year 2016 estimate. The guidance given for February’s quarter was considered soft as it fell below consensus and the firm’s estimates. Micron’s guidance implies that if memory prices remain unchanged through the rest of the quarter, gross margin could fall on a sequential basis, driven by rising NAND costs. The DRAM cost per bit is expected to be flatter to flat in this quarter, and the numbers suggest that commodity DRAM gross margin could decrease on a sequential basis in the quarter if DRAM prices were to remain unchanged from now until the end of the period. Trade NAND bit growth amounted to a sequential increase of 20%, but with the NAND average selling price down 6% sequentially. This is paving the way for a drop in NAND gross margin.

Wells Fargo’s investment thesis for Micron was:

Micron has a diversified portfolio of DRAM, NAND flash and NOR flash memory products. The company has made a number of significant investments and acquisitions to expand its manufacturing capability at what we consider to be advantageous prices. However, we think there is risk associated with the high fixed cost and commodity-like nature of the semiconductor memory business, which makes us cautious on the stock when its price rises above what we consider to be an appropriate valuation multiple.

Zacks currently puts Micron at Rank #2, or Buy. The firm noted that the company’s most recent revenues and earnings compared favorably. These results were boosted by improving market conditions, as well as an encouraging operating performance. Micron is positive about its product launches and growing demand for its products, particularly SD products. The company is optimistic about the supply and demand balance for DRAM and NAND memory chips in 2016, which should, in turn, support prices. However, it may not be easy for Micron to take market share away from SanDisk Corp. (NASDAQ: SNDK), but with its main customers being Apple Inc. (NASDAQ: AAPL) and Intel Corp. (NASDAQ: INTC), Micron should do fine going forward.

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Shares of Micron were down fractionally at $32.76 approaching the noon hour Wednesday. The stock has a consensus analyst price target of $42.35 and a 52-week trading range of $21.02 to $36.59. The market cap is roughly $34 billion.

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