Micron Technology(US:MU) Huajing Securities·2026-03-11 05:53Investment Rating - The report maintains a "Hold" rating for Micron Technology (MU US) with a target price raised to $361.00 [1][3][13] Core Views - Concerns arise over the rapid increase in storage prices potentially weakening downstream demand, with server-grade DDR5 modules rising over 600% and consumer-grade DDR5 modules increasing by 250-400% from early 2025 to February 2026 [1][2] - Despite short-term concerns, there is potential for further stock price increases as market expectations adjust, particularly with anticipated growth in AI applications and capital expenditures from major cloud service providers (CSPs) expected to exceed $710 billion in 2026, reflecting a 61% year-over-year growth [2][10] - Micron's revenue and net profit estimates for fiscal years 2026-2027 have been significantly increased, reflecting the impact of rising storage prices and improved utilization rates, with net profit projections increasing by 211.6% to 559.0% [3][11] Financial Summary - Revenue projections for 2026 are estimated at $77.341 billion, with a year-over-year growth rate of 106.9%, and for 2027, revenue is projected at $101.608 billion, reflecting a growth rate of 31.4% [9][20] - The estimated earnings per share (EPS) for 2026 is $34.70, a significant increase from $10.42, and for 2027, the EPS is projected at $46.56, up from $6.29 [5][11] - The report indicates a substantial increase in gross profit margins, with a projected gross margin of 67.3% for 2026, compared to 39.8% in 2025 [20] Valuation - The valuation approach uses a sum-of-the-parts (SOTP) method, estimating the DRAM segment at $352.684 billion and the NAND segment at $20.487 billion, leading to a total equity value of approximately $394.939 billion [13][14] - The target price of $361.00 is based on a price-to-earnings (P/E) ratio of 10 for the DRAM segment and 5 for the NAND segment, with net cash of $21.721 billion included in the valuation [13][14]