Bank of America Reaffirms Buy Rating on Micron with Target Price of $155

Bank of America believes that SanDisk's recently announced long-term growth targets may provide a reference for Micron's valuation reset. The firm reiterates its "Buy" rating on Micron, maintaining a target price of $1550, which is approximately 61% higher than the current stock price of $963. SanDisk expects its sales to grow at an average annual rate of nearly 15%, with gross margins projected to exceed 80% by fiscal year 2030. BofA points out that if Micron can maintain similar growth and profit margins driven by AI-driven HBM demand and supply discipline, its business may no longer be viewed as a traditional cyclical storage business. BofA anticipates that Micron's FY30 earnings per share could reach between $200 and $250, and if a higher valuation is assigned to its AI-related HBM business, its earnings and valuation potential will further expand. Additionally, BofA expects Micron to achieve a price-to-earnings ratio of 12 to 15 times in the future, no longer being priced solely as a traditional storage cyclical stock. In terms of cash flow, BofA predicts that after the expiration of CHIPS Act-related restrictions in December 2026, Micron may increase its stock buyback efforts, with free cash flow potentially exceeding $80 billion, theoretically sufficient to repurchase nearly 10% of its market value annually, thereby driving EPS growth. BofA believes that Micron should focus on whether high gross margins can be sustained, whether management can strictly execute capital return plans, and the trends in HBM demand and pricing.

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