TD Cowen Reiterates Buy on Micron, $1,600 PT

TD Cowen analyst Krish Sankar reiterated a Buy rating and $1,600 price target on Micron Technology (NASDAQ: MU).

“We hosted investor meetings with MU’s CEO Sanjay Mehrotra and CFO Mark Murphy. Physical constraints continue to limit supply, while demand remains strong.

The goal of the SCAs is to maintain bit share and move it to profitable higher-value solutions over time.

Messaging/ sentiment reminds us of the early days of HDD re-rating (mid-2025), when OEMs emphasized supply discipline & stocks under-owned.

Demand: MU reiterated that tightness is expected to persist beyond 2027. Importantly, demand is so strong that even customers SCAs still do not meet their total volume requirements.

Nearly 50% of total revs are expected to be covered by SCAs LT. In our view, the SCAs span the range of customers from the 4 big hyperscalers, to enterprises (maybe Dell), to the big automakers.

More broadly, we believe Micron’s strategy is to be consistent and fair to customers and provide predictability and secure volumes via SCAs and price ceilings, while still preserving upside through higher pricing on the non-SCA side, which should remain a sizable portion of the business.

Here, our recent field work indicates DDR ASPs will likely grow 15%+ in CQ3 followed by mid-single digit growth in CQ4:26/CQ1:27/CQ2:27 (we modeled flat sequential pricing in 1H:27 so that’s incrementally positive).

This implies upside to Street’s $160 EPS estimate for CY27.”

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