Weekly Muse-ings: A Closer Look at Micron's SCAs and The Significant Positive for Future Price Discovery (and Raising MU Price Target to $2,000)

Research evidence excerpt

Weekly Muse-ings: A Closer Look at Micron's SCAs and The Significant Positive for Future Price Discovery (and Raising MU Price Target to $2,000)

June 27, 2026

revenues are at both 65% and 70% gross margins. Very importantly, we

highlight instead of our $170, the earnings scenarios would drop by 11%

and 15%, respectively, to $151 and $146. But considering again our vision

for likely upside, we see a worst-case scenario of $170 for Micron in CY27

under the most onerous SCA pricing corridors possible. Not bad, in our view.

Finally, while Micron is currently restricted from repurchasing shares as

a result of agreements with the Chips Act office, we do note that these

restrictions completely go away on December 13th. As we reflect on the

company’s current Balance Sheet, anticipated cash deposits of at least

$18B, and a vision for the company wanting net cash of $50B to run the

business, we highlight meaningful capacity for share repurchases over the

next 12-24 months. More specifically, we see a scenario where Micron

could repurchase (at today’s stock price) 9% of the total company in the

next 12 months and 22% over the next 24 months. Just another positive

driver for shares.

Add it all up and we view our $1,500 price target as too conservative.

With a clear path to $200 in EPS in CY27 and further upside stretch goal of

$250 in CY28, a durable and elongated cycle supported by 5yr SCAs, and a

backdrop where Micron could buy 20% of outstanding shares over the next

24 months, we think our assumed multiples of 7.5x/6x CY27/28 stretch EPS

is simply too conservative. To this end, we are raising our price target to

$2,000 – now reflecting 10x likely earnings in 2027 (and dare we say this is

likely conservative as well). MU remains a TOP PICK.