Micron: The recovery is here; raising Target Price to $100
Memory is the last segment in semiconductors where expectations have not bottomed yet and where the recovery in stock prices remains muted.We nevertheless are past the bottom of the cycle, with COGS excluding write-downs (actual demand) already recovering, which indicates that the worst of the correction of customer inventories is behind us. Manufacturer inventories are slowing the recovery in utilization and gross margins, but it will play out steadily over the second half and next year.
We expect as a result healthy beats and steady earnings revision, driving stocks to the higher end of their valuation range. We increase our Target Price on Micron to 6x EV/Forward COGS, in line with where the stock traded in 2018 and early 2022. This results in a $100 Target Price (56% upside).
Micron Technology provides memory and storage solutions. The company's portfolio of memory and storage technologies include Dynamic Random Access Memory, Not And, 3D XPoint? memory, and Not Or. The company's segments are: Compute and Networking Business, which includes memory products sold into client, cloud server, enterprise, graphics, and networking markets; Mobile Business, which includes memory products sold into smartphone and other mobile-device markets; Storage Business, which includes Solid-State Drives and component-level solutions sold into enterprise and cloud, client, and consumer storage markets; and Embedded Business, which includes memory and storage products.
Provided by our team of experienced analysts, our work is idea driven, based on independence of thought, sector expertise, and firmly focussed on fundamentals and valuation.
New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:
- Pan European Telecom Services and Cable
- US Telecoms, Cable, Satellite and Towers
- Global Emerging Market Telecoms
- Japan Telecoms
- Asian Internet
- Pan European Healthcare
- Global healthcare thematic research
We provide debt research on:
- Pan European Telecom Services and Cable
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.