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Micron Technology Set for Higher Re-Rating on Long-Term Agreements, EPS Durability, UBS Says

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Micron Technology (MU) is benefiting from long-term memory agreements, with the stock expected to re-rate higher as structural changes in the memory complex become clearer and earnings visibility improves, UBS Securities said Tuesday.

The investment firm said the new 'enhanced' LTAs include longer durations, fixed volume commitments, and a partially fixed pricing framework. Hyperscalers have secured about 60% to 70% of the industry's Server DDR5 volumes under these agreements, ensuring offtake for Micron and other suppliers, according to the note.

The enhanced LTAs benefit memory suppliers by providing a smoother earnings and revenue profile, higher cross-cycle return on invested capital, and improved visibility into committed customer demand, the brokerage said.

UBS is raising earnings per share estimates across calendar years 2027, 2028, and 2029 to $155, $167, and $117, respectively, from $133, $122, and $77 previously. The brokerage expects Micron's EPS to remain more than $100 through calendar year 2029.

UBS reiterated its buy rating on Micron Technology and raised the price target to $1,625 from $535.

Shares of Micron Technology rose 18% in Tuesday trading.

Price: $885.83, Change: $+134.83, Percent Change: +17.95%

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