Micron Technology Inc. (NASDAQ: MU) is set to announce earnings this week, and so far 24/7 Wall St. has tracked two very positive analyst research calls ahead of the report. While the ratings are positive here, there are some caveats and some lowered numbers that investors should really consider. After all, after the drop that has been seen in Micron, a “good report” might not sound all that good when that report actually gets issued.

Credit Suisse has an Outperform rating but talked its expectations down to well under the consensus estimates. Wells Fargo decided to raise its formal rating to Outperform from Market Perform due to valuations, but it also trimmed some of its own earnings expectations.

Credit Suisse said that it sees Micron reporting earnings of $0.28 per share, under what it listed as the consensus target of $0.34 per share. It further expects Micron’s guidance to be in a range of $0.15 to $0.20 per share, versus its formal $0.20 estimate, but way under the street target of $0.44 per share.

Credit Suisse noted that the 2015 DRAM market continues to be plagued by weaker demand, more than offsetting what has traditionally been predictable and benign supply growth. The firm lowered its unit growth expectations, but DRAM Bit supply growth expectations were left unchanged at 25% from a year ago. The firm believes this is a bottoming process fundamentally and that this is near troughs on valuation, but it expects weakness near term before two meaningful catalysts in 2015. Tuesday’s report said:

The stock is trading at trough multiples even though profitability is much better than prior cycles — specifically Micron is trading at about 0.6 times replacement value …

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As mentioned, Wells Fargo’s formal analyst rating was raised to Outperform from Market Perform. The firm sees upside potential from the current stock price to its valuation range, but the ongoing slide in DRAM pricing has led it to lower expectations on sales and earnings.

Its 2015 GAAP earnings estimate was lowered to $2.31 per share (from $2.38) and its 2016 GAAP earnings estimate was cut to $1.10 per share (from $1.35). Wells Fargo introduced a 2017 estimate of $1.80 per share.

Wells Fargo’s $16 to $19 valuation range is based on approximately 9.0 to 10.5 times its own fiscal 2015 earnings per share target. That is also based on historical valuations, and the firm noted that risks to its numbers would be from higher capital spending and volatile DRAM and NAND prices, Tuesday’s report said:

Although we believe that there are many near terms risks for Micron in particular and the memory industry in general, we believe that memory industry financial dynamics have improved in recent years, with some amount of consolidation in the DRAM industry (e.g. the dissolution of Qimonda and the acquisition of Elpida by Micron) and efforts on the part of the major DRAM and NAND manufacturers to improve margins and capital efficiency. Over the last two years, Micron has demonstrated a clear ability to generate profits and cash, in our view.

As far as the consensus estimates, investors need to consider that this week’s report will cover Micron’s fiscal fourth-quarter earnings. Thomson Reuters has its consensus earnings estimates at $2.66 per share for the year, $0.33 per share for the quarter, and its next quarter report is at $0.38 per share. For the record, the consensus quarterly revenue estimate of $3.56 billion would be a drop of almost 16% from a year earlier.

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Thomson Reuters also has a consensus estimate for fiscal 2016 annual earnings of $1.93 per share. Revenues for the year are expected to be down almost 3% to $15.7 billion.

Micron shares were up more than 4% to $14.65 Tuesday morning. The stock has a 52-week trading range of $13.50 to $36.59, and its consensus analyst price target is still closer to $25.00.

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