Major Rating | Bank of America: Raises Micron's target price to $1,550, reiterates "Buy" rating

Glonghui, June 29 — Bank of America Securities released a report stating that Micron has once again delivered strong quarterly results, reinforcing the bank’s constructive view on the role of memory in artificial intelligence as well as supporting a more sustained cycle with increasing supply-side discipline. Although the number of Strategic Customer Agreements (SCA) has now reached 16, which may moderately limit near-term pricing upside, they significantly enhance visibility and reduce volatility by aligning with clients facing rising memory taxes (which account for around 35% of AI capital expenditures). Valuation remains attractive, with shares implying a free cash flow yield of about 10%, and the bank expects capital returns to increase significantly after the anniversary of the CHIPS Act in December 2026. The bank reiterates its “Buy” rating on Micron, raises its earnings per share forecast for the coming years by 4% to 7%, and, based on a sum-of-the-parts valuation (SOTP), increases its price target from US$1,500 to US$1,550, valuing the core memory business at approximately three times book value (previously 2.5 times), while the data center/artificial intelligence business remains at a price-to-earnings ratio of 31x.