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Micron Technology, Inc.
MU Details
Micron Technology, Inc. (NASDAQ: MU) is a provider of memory and storage solutions. The Company's product portfolio includes dynamic random-access memory (DRAM), negative-AND (NAND), three-dimensional (3D) XPoint memory, and NOR, solid-state drives, graphics and high bandwidth memory (HBM), managed NAND and multichip packages.
Financial Results
Outlook
The company is confident in the long-term demand as well as it is deploying prudently in order to preserve the technology as well as product portfolio competitiveness. For Q3 FY 2023 (GAAP outlook), the company is expecting revenue of $3.70 billion (± $200 million).
Key Risks
Volatility in the average selling prices of the products, the highly competitive nature of the industry, etc. are some of the risks MU is exposed to.
Fundamental Valuation
EV/Sales Multiple Based Valuation
Stock Recommendation
The stock has been valued using EV/Sales multiple-based illustrative relative valuation and the target price so arrived reflects a decline of low double-digit (in % terms). A slight discount has been applied to EV/Sales multiple-based (NTM) (Peer Average) considering higher competition, geopolitical risks, etc.
Hence, considering the target level attainment, resistance around the current trading levels, macro-economic uncertainties hovering around the broader market on the back of rising inflationary pressure and increasing cost of capital, a ‘Sell’ rating is assigned to “MU” stock at the current market price of USD 63.70 (as of March 30, 2023) at 07:01 AM PST.
Technical Overview:
Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for share price chart is based on 30 March 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.
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