TD Cowen Raises Micron Price Target to $500

TD Cowen analyst Krish Sankar raised the price target on Micron Technology (NASDAQ: MU) to $500.00 (from $450.00) while maintaining a Buy rating.

“We expect MU to report $10.40 EPS for FebQ (Street @ $8.82) and guide $13.50 EPS for May Q (St. @ $10.92).

For CY26/27, we model $65/$90 EPS, and we see book value per share of $120 and $215 exiting CY26 and CY27, respectively.

From here, we do see further upside potential (15% further upside on CY27 towards +$100 EPS), but as pricing expectations become high and consume ~20ppts of CSP CapEx, the main driver will turn to re-rating via durability of pricing/earnings (versus the market today applying a trough multiple on what is perceived as peak earnings).

An interesting analog is HDDs, which backed by LTAs (volume and price fixed for 1 year, volume-only after) and disciplined supply, are trading at twice the multiple of memory stocks.

We do not see MU P/E doubling, but a 1x P/E expansion could = +20% stock return.

Our field work supports this – DRAM remains the tightest market over next 2 yrs (followed by HDDs, then NAND), suggesting similar LTA momentum in DRAM to HDDs is achievable.

Risk remains if some customers are piling up inventory, resulting in a 2021-2022 like correction. We expect to get more clarity on that next few quarters.

Today’s multiple for MU still implies the market is supporting peak GMs in CY27 (+80%) followed by a normalization toward 50% in the years after.

Volume & Price LTAs are the clearest path to establishing a floor above that implied outcome.”

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