美光科技：这次不同，将目标价上调至1400美元

Micron Technology Inc (MU.O) It’s Different This Time; Raising TP to $1400 CITI'S TAKE We are buyers of Micron after the company signed Strategic CustomerAgreements worth ~40% of sales to be covered over the next five years.Micron talked about a transformed business model driven by memoryshortages through 2028 with improved visibility and durablity. The take orpay contracts with annual volume commitments, upfront cash deposits,price band ceiling using C2Q pricing, and floor price negotiated everyquarter to deliver gross margins above prior peak margins creates more trustin the DRAM industry vs the historical cyclers, in our view. Moreover, Micronplans to return 100% excess cash to shareholders up from prior 50%. We liftour FY26/27 EPS estimates 19%/20% on higher mix of contracted vs cyclicalbits. We lift TP to $1400 on consistent 10x P/E (40% premium to 5x trough Price (24 Jun 26 16:00)US$1,048.51Target priceUS$1,400.00↑from US$1,200.00Expected share pricereturn33.5%Expected dividend yield0.1%Expected total return33.6% Results:MU reported May-Q sales and non-GAAP EPS (inc. SBC) of $41.5billion/$24.82vs.our prior estimates of$35.5 billion/$19.98 and FactSetconsensus of $35.9 billion/$20.70. May-Q gross margin (inc. SBC) came in at84.6%, vs. our prior estimate of 80.6% and FactSet consensus of 80.4%. Guidance:MU guided Aug-Q sales and non-GAAP EPS (inc. SBC) to $50.0billion/$30.68vs.our prior estimates of$42.0 billion/$24.27 and FactSetconsensus of $43.6 billion/$24.95. Aug-Q gross margin (inc. SBC) was guided to85.7%, vs. our prior estimate of 82.0% and FactSet consensus of 81.5%. 100% Cash Return Target:Micron is delivering record cash flow numbers.MU paiddown a lot of debt in the past year and will maintain levels of cash so that they caninvest in all seasons. Micron grew its dividend by 30% recently and intends to growdividend over time.The principal cash return will be share buybacks. HBM:Demand for HBM products far exceeds MU supply, even including SCAs.Demand for HBM in 2027 and 2028 is well above the amount Micron can supply, andthis is also true for non-HBM DRAM. Micron saw the HBM TAM increase. Micronpreviously said the HBM TAM would cross $100 billion in 2028, now they see it easilycrossing $100 billion in 2027. Atif MalikAC+1-415-951-1892atif.malik@citi.com James Bowlin+1-415-951-1790james.bowlin@citi.com Kelsey Chia, CFA+1-415-951-1791kelsey.chia@citi.com MU F4Q26 Earnings Review Revenue mix.DRAM/HBM tends to be 75%-80% versus NAND 20%-25%. Micronis comfortable at that mix and can serve customers in these categories.In HBM,Micron’s goal is to have HBM share consistent with their DRAM share. AEBU andMCBU are 40% of MU sales. Micron believes in its strength of diversity including DRAM/NAND bit industry CAGR.Micron provided updated 2026-bit demandforecast. DRAM forecast is up a little bit and NAND is relatively similar. Micron isnot providing more forward-looking views on these CAGRs because bit shipmentsaren't determined by demand anymore, they are determined by supply. Micron is SCAs.These customer agreements or SCAs cannot be canceled. Customers cannotwalk away.They are designed to be take-or-pay and are generally 5-yearcommitments. They are annual volume commitments for each year. Take-or-paymeans customers are obligated to pay for price times volumes whether they wantto purchase the bits or not.There is a price band with a price ceiling or price floor. Cash deposits.There are also upfront cash deposits that these agreements entail.These are cash deposits or a letter of credit. Of the 16 agreements, these aggregateto $22 billion in cash and financial commitments. Cash alone is $18 billion. Thetarget number of agreements will go from ~20% DRAM bits and 1/3rd of NAND bitsto account for half of the company revenue. Cash associated with these will DRAM bit cost.The industry-wide trend of higher performing solutions such asHBM, higher trade ratios, and the Greenfield built out will increase DRAM bit cost inthe near term. Startup costs will begin meaningfully in F4Q26 and in the first half ofnext year. They expect to see $100 to $200 million per quarter versus what was Supply.General sense across customers is Micron is short of its demand. Theoverall aggregate supply is substantially below aggregate demand for both DRAM Capex.Micron capex will be higher than mid 40’s billion in F27. Managementstated they would update investors if it were in the 50’s or mid 50 billion. Micronwill spend $10 billion in F4Q26 and that will step up in F27. Greenfield capacity DRAM and NAND.Micron’s NAND SSD enterprise momentum is “strong” as theyhad a $5 billion quarter in enterprise SSD within $25 billion of DC revenue thisquarter. The company hit record share in data center SSDs in F3Q26. Both DRAMand NAND are constrained. Customers are interested in NAND through SCA, but DRAM is more constrained and harder to supply. Customers are more concerned China competition.China memory makers have grown over