Barclays Raises Micron Price Target to $1,175

Barclays analyst Tom O’Malley raised the price target on Micron Technology (NASDAQ: MU) to $1,175.00 (from $675.00) while maintaining an Overweight rating.

“At its last earnings, MU mgmt announced it signed its first 5yr Strategic Customer Agreement, or SCA.

However, unlike SNDK, the company has provided very little detail on the structure of the agreement outside of the timeline and the general idea of strategic coordination with the customer on supply planning.

Historically, the company signed yearlong LTAs with a level of committed volume where price was negotiated quarterly and volume could change.

This has given way to multi-year agreements with guaranteed amounts of volume.

We are of the opinion that as MU signs more of these SCAs they will provide similar information to SNDK, giving details on the financial hooks and potential prepayment structures they are contracting.

When these details come to light, we see it as a positive catalyst and another step forward in the sustainability of this memory cycle.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.