MU – Although competitive pressures may drive multiples back toward historical averages in the long-run, there is potential for continued positive momentum in the near-term

• Micron Technology, Inc. (MU:USA) currently trades above historical averages, with a 1.3x UAFRS-based (Uniform) P/B, implying bullish expectations for the firm. Longer-term, these valuations may be somewhat aggressive should the firm face competitive pressures, as well as pressure related to supply/demand dynamics; however, current management sentiment suggests the potential for continued equity upside in the near-term
• Specifically, management generated an excitement marker when talking about their customers’ demand trends. Additionally, they are confident about their efforts to drive greater mix of high-value solutions, and their ability to be net cash positive as they exit FY2018. As such, while industry supply and demand dynamics will likely drive weak and volatile profitability over the long-run, current fundamental momentum will likely support continued near-term equity upside