Micron (MU) | FQ4 FY26 First Take: Maintain BUY, PT $2,300
Rating
BUY
Price target
$2,300
Access
INH Research members
The contracts are carrying the cycle. The FQ1 guide of $61.5B is 7.9% above LSEG consensus, 26 SCAs back about $150B of RPO, and the stock trades at 6.5x FY27 consensus.
| Summary | Detail |
|---|---|
| INH rating | BUY (maintained) [P1] |
| INH price target | $2,300 (unchanged) [P1] |
| Price | $1,045.56 close, Tue Oct 6, 2026 [C17]. Print-day close: $1,065.11 official close, Wed Sep 30, 2026 [C12]. After hours on Sep 30 the stock was little changed, with third-party snapshots from $1,056.75 to $1,069.00 [C14][C15][T1]. Thu Oct 1: traded lower through the morning (day low $1,022.90), then closed up 3.0% at $1,097.39 [C17] |
| Market cap | $1,181B at the Oct 6 close ($1,203B at the Sep 30 close) on 1,129.4M shares outstanding (10-Q cover, Jun 17, 2026) (INH calc) [M6][C17] |
| Implied upside to PT | +120.0% from the Oct 6 close; +115.9% from the Sep 30 close (INH calc) |
| PT on forward EPS | 14.3x FY27 (Aug) consensus EPS of $160.39 (Nasdaq.com, retrieved Oct 1) (INH calc) [C13] |
| FQ4 FY26 (14 weeks ended Sep 3, 2026), reported Wed Sep 30, 2026 after the close. 8-K Items 2.02/9.01 filed 4:02 PM ET [M1] |
Source: INH Capital; Micron 8-K and Ex. 99.1 (Sep 30, 2026); Nasdaq.com; Yahoo Finance daily data (accessed Oct 7, 2026); SEC XBRL. Price data is third-party. Vendor snapshots differ: Investing.com shows a $1,066.10 close [T1].
Key takeaways
- The guide is the print. FQ1 FY27 guidance of $61.5B ± $1.5B revenue and $38.15 ± $1.00 non-GAAP EPS sits 7.9% and 7.8% above LSEG consensus ($57.0B / $35.40) [M1][C1]. The low end of each range ($60.0B / $37.15) clears every pre-print vendor figure we found [C4][C6][C7][C8]. Guidance above expectations is significant, and this one is above on both lines.
- FQ4 beat the top of the range on every line. Revenue was $54.23B against a $50.0B ± $1.0B guide and $51.07B LSEG consensus. Non-GAAP GM was 87.0% against about 86%. Non-GAAP EPS was $33.42 against $31.00 ± $1.00 and $31.61 LSEG [M1][M4][C1].
- Long-term agreements are the thesis, and they scaled. The SCA count is 26, up from 16 in June. Micron estimates coverage at over 35% of revenue through 2030. Customer financial commitments rose to $32B from $22B projected in June, and RPO is about $150B at floor pricing. Micron has signed its first agreements running into 2031 [M2][M5].
- More than 75% of FY27 shipments are committed [T1][T2]. Allocation talks have moved to 2028, and management said it does "not have line of sight to when supply and demand will return to balance" [M2].
- We are not concerned about margins. FQ1 GM guidance of about 86.25% is 75bp below FQ4 and 6bp below FactSet's 86.31% [C2]. Management attributes the dip to FY26 incentive pay that was capitalized into inventory, and calls FQ1 "the floor for gross margins in fiscal 2027" [M2].
- Cash generation is outsized. FQ4 operating cash flow was $43.97B and adjusted FCF $33.20B. Net cash is $68.3B. Capital return steps up from Dec 9, 2026 [M1][M2].
- Valuation. At the Oct 6 close of $1,045.56 the stock trades at 6.5x FY27 consensus EPS ($160.39) and 6.9x the FQ1 guide annualized ($152.60) (INH calc) [C13][C17]. Our $2,300 PT works out to about 14x FY27 EPS on consensus or INH scenarios. Maintain BUY.
Continue reading
The rest of this note is for INH Research members.
- 🔒1. Results vs guide vs consensus
- 🔒By technology and business unit
- 🔒2. Guidance vs consensus (FQ1 FY27)
- 🔒3. Long-term agreements (SCAs): the core of our BUY
- 🔒4. HBM and AI data center demand
- 🔒5. Margins: why we are not concerned
- 🔒6. Capex and supply discipline
- 🔒7. Growth outlook
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