Micron: Color on Analyst Day (55.48)
- Cowen raises their MU tgt to $67 from $65. Near term, the financial picture continues to impress as ASP momentum elevates the company's strong execution of its tech road maps. Given a strong demand narrative w/in data center and autos and MU's confidence on yields, they think it makes increasing sense to accelerate DRAM tech enablement. They expect ~$8B/yr of FCF, clearly supporting the massive $10B buyback.
- Stifel raises tgt to $106 from $101. Micron's Analyst and Investor Event held in NYC delivered a clear message that Micron's execution to its strategy and end markets are very healthy. Along with initiating a $10bn share repurchase program, mgmt expects to return 50% of FCF to shareholders. They believe mgmt addressed investors' concerns over capacity by explaining that y/y bit capacity increase is limited to 20% for DRAM and 40%-45% for NAND Flash despite CapEx increases y/y. Mgmt's discussions were around both Micron and the memory industry transforming. Mgmt highlighted strucutral cost reductions since FY16 ($6bn to date + $3bn expected by FY21), managing for ROI above cost of capital, value added products and profitable growth. There was little to no discussion around market share gains. They continue recommending the MU shares as the market will eventually believe that the memory market has transformed
- Rosenblatt raises tgt to Street-high $115.
- Nomura, Morgan Stanley and BAML remain positive
- MU +5.4% premarket