- Micron Technology, Inc. (MU) currently trades well below corporate and recent averages relative to Uniform earnings, with a 7.2x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to fade to near cost-of-capital levels, accompanied by 7% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to improve to 17% in 2023, accompanied by 7% Uniform asset growth.
- If sustained in perpetuity, would imply a stock price closer to $269, representing significant equity upside for the firm. That said, the firm is unlikely to sustain peak-cycle returns given the volatile nature of semiconductors
- That said, the firm’s most recent earnings call suggests management may have concerns about product launches, technology improvements, and growth.
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