마이크론,향후 2년간 실적이 증가할 것(2022.01.14)

2022.01.14

Micron Technology Stock Forecast: What To Watch For In 2022 (NASDAQ:MU) | Seeking Alpha

 

Summary

• Micron benefits from macro tailwinds and the oligopoly in its industry.
• 마이크론은 거시적 순풍과 산업의 과점으로 이익을 받고있다.

• The current year will be very profitable for Micron, and earnings will likely be even higher
• in the following two years.
• 올해 마이크론은 이익이 클것이고, 향후 2년간 이익은 더 증가할 것같다.

• Shares are not expensive, but the risk-reward setup is not as great as it was last fall
• when shares were even cheaper.
• 마이크론 주식은 비싸지않지만,주식이 조금 더 하락하더라도 하락 위험 보상은 지난 가을만큼
• 크지않을 것이다.

Article Thesis

Micron Technology, Inc. (NASDAQ:MU) has seen its shares rise rapidly over the last two months on the back of a recovery from an unjustified share price decline last fall.

With macro tailwinds, Micron gaining strength in areas such as data centers, and thanks to solid cash flows and an inexpensive valuation, Micron has additional upside potential over the current year.

This is despite shares having rallied by more than 40% from their 52-week low already.

 

마이크론은 지난 가을 부당한 주가 하락에서 회복세를 보이면서 지난 2개월 동안 주가가 급등했습니다.

거시적 순풍으로 Micron은 데이터 센터와 같은 영역에서 강세를 보이고 있으며 견고한 현금 흐름과 저렴한 가치 평가 덕분에 Micron은 올해 추가 상승 잠재력이 있습니다.

이는 주가가 이미 52주 저점에서 40% 이상 상승했음에도 불구했음에도 말입니다.

MU Stock Key Metrics

Micron is one of the largest DRAM producers in the world. Thanks to a strong demand picture -- DRAM is needed for all kinds of technologies, including big data, computing, smartphones, autonomous driving, and so on -- Micron has been able to generate compelling revenues in the recent past:

 

마이크론은 세계 최대 DRAM 생산업체 중 하나입니다. 강력한 수요 그림 덕분에 -- DRAM은 빅 데이터, 컴퓨팅, 스마트폰, 자율 주행 등을 포함한 모든 종류의 기술에 필요합니다 -- Micron은 최근에 강력한 수익을 창출할 수 있었습니다.

 

아래 그림 보라색은 마이크론의 지난 실적.

주황색은 분기 실적.

 

Data by YCharts

 

Since early 2020, Micron's trailing twelve months revenue has risen constantly, which was possible thanks to an upward trend in the company's revenue on a quarter-to-quarter basis.

That stopped during the most recent quarter when MU's revenue declined on a sequential basis.

 

2020년 초부터 Micron의 12개월  수익은 지속적으로 증가했으며 이는 분기별 회사 수익의 상승 추세 덕분에 가능했습니다. 이런 추세는 MU의 수익이 전분기대비 감소한 가장 최근 분기 동안 중단되었습니다.

 

But even at the current pace, Micron Technology's ttm revenue could continue to rise for a while. A $7.7 billion quarterly revenue number equates to around $31 billion in yearly revenue, which is higher than the current ttm number of a little below $30 billion.

 

그러나 현재 속도에서도 Micron Technology의 지난 1년간 수익은 한동안 계속 증가할 수 있습니다.

77억 달러의 분기별 매출 수치는 연간 매출로 약 310억 달러에 해당하며, 이는 300억 달러에 약간 못 미치는

현재 기준 지난 1년간 실적 수치보다 높습니다.

 

Revenue is generally impacted by two key factors, Micron's sales volumes, and its ASP, or the price per unit that it is able to demand from customers. Sales volumes have historically been rising relatively consistently, as our modern way of living requires a steadily rising amount of memory power for communication, entertainment, commerce, etc.

 

매출은 일반적으로 두 가지 주요 요인인 Micron의 판매량과 ASP 또는 고객에게 요구할 수 있는 단위당 가격의 영향을 받습니다. 우리의 현대 생활 방식은 통신, 엔터테인먼트, 상거래 등을 위해 꾸준히 증가하는 메모리 용량을 필요로 하기 때문에 역사적으로 판매량이 상대적으로 꾸준히 증가해 왔습니다.

 

However, pricing is not steadily improving, as there are times when the supply-demand situation is more in favor of memory producers such as Micron (resulting in high ASPs), and times when supply is growing faster than demand, which is when ASPs contract. This can result in revenue declines despite rising sales volumes. In the past, when the memory industry was more fragmented, those cycles were more pronounced. They have become less severe in the recent past thanks to consolidation in the industry. With the memory industry being an effective oligopoly, unreasonably large supply growth is not a major concern any longer, which is why Micron's revenue and profit have become less cyclical over the last decade. Some cyclicality still exists, however. Micron has also been moving towards higher-value segments in the memory industry, such as high-bandwidth memory, where Micron is active with its HBM2E offering. Micron's Authenta technology, which allows for some additional protection on a system-level basis in IoT devices and similar products, is another way for Micron to provide non-commodities, value-add products. In these less generic, less commoditized product categories, Micron can more easily demand fixed prices and lock in longer-term contracts, which lessens the cyclicality further. This, combined with the aforementioned factors such as the oligopoly working better and the longer-term demand picture looking good, should allow Micron to become an even less cyclical company over the years. Less pronounced cyclicality has significant tailwinds, and should allow for more consistent shareholder returns and could also warrant a higher valuation (e.g. a higher earnings multiple).

Data by YCharts

Micron's cash flow has been surging in recent quarters. Based on the close correlation with the company's EBITDA, which is forecasted to rise massively this year and next year, investors can expect further growth in Micron's cash generation. If Micron hits the analyst estimate for $22.5 billion in EBITDA next year (September 2022 to August 2023), the company could be generating $20+ billion in cash from operations in that year. Relative to a current market capitalization of around $100 billion that would be highly compelling. High cash flows would also allow for a further increase in Micron's shareholder returns, either via more aggressive buybacks or via higher dividend payments (or both).

According to Micron Technology's most recent 10-Q filing, the company had $9.6 billion in cash on its balance sheet at the end of November, partially offset by $7 billion in short- and long-term debt. In total, that makes for a net cash position of close to $3 billion, which gives Micron a very healthy balance sheet. It also provides for a lot of optionality when it comes to making acquisitions, increasing capital expenditures, or increasing shareholder returns.

What To Watch For In 2022

In the current fiscal year, which ends in August, Micron will likely generate highly attractive profits. Even more importantly, current forecasts see Micron generate even higher profits in Fiscal 2023:

Data by YCharts

With Micron likely to earn about $9 this year, and $12 and $13 in the following two years, the company will be highly profitable for three years in a row. Compared to the cyclicality that Micron experienced in the past, that is a strong feat. This can be attributed to the factors mentioned above, such as a strong demand picture, a move into less cyclical product lines, etc. The ongoing global semiconductor shortage also is a tailwind, as it allows for strong pricing.

 

Micron's shares have already risen by around 40% over the last couple of months since bottoming in fall 2021, but shares have more upside potential. Investors should keep an eye out for announcements by Micron and its peers when it comes to capital spending plans. If Micron and/or the other members in the memory oligopoly (Samsung (OTC:SSNNF) and SK Hynix) become too aggressive with capacity expansion plans, that could negatively impact the supply-demand picture. Lower average sales prices would hurt all members in this oligopoly, including the company that started it all by building out production capacity too aggressively. For all three players, it is important that capacity additions are in line with or below forecasted demand growth. Capacity addition plans by Micron and its peers are thus an important item to watch for Micron's shareholders, as this will likely have an impact on MU's profitability in the coming years, although with a time lag, as it takes a while for new fabs to come online.

Investors will also be highly interested in seeing where Micron will go when it comes to its shareholder return program. The company is currently paying out $0.10 per share per quarter in dividends, which makes for a yield of around half a percentage point. Thanks to a payout ratio of around 5%, Micron could easily ramp up its dividend spending considerably. Even if the company were to hike the payout by 300%, it would only have a dividend payout ratio of around 20%, which would still be quite conservative.

Due to a not very high valuation, it is likely that management will continue to favor buybacks as a form of returning cash to the company's owners for now. That does make some sense, especially if one is positive about MU's longer-term outlook, which seems to be the case for management. With Micron getting a new CFO (its CFO moved on to become CFO at Intel (NASDAQ:INTC)), there is some uncertainty around Micron's future cash return policy. It is likely that investors will get more information on that subject in coming earnings calls and shareholder events.

What Is Micron Technology's Price Target?

Micron has risen sharply since bottoming in the $60s, but its shares are by no means expensive today. Based on forecasted earnings for the current year, Micron trades at 10.7x net profit, while the earnings multiple for the coming year stands at just 8x. It is thus not surprising that analysts are seeing solid price upside potential for Micron's shares over the next year:

Data by YCharts

Based on a twelve-month price target of $108, Micron has about 15% upside potential according to Wall Street. I do believe that Micron should trade at 9x forward net profits or higher at the beginning of its fiscal 2023, i.e. in fall 2022. This gets us to a price target of $105, implying an upside potential of around 10% from the current level.

Is MU Stock A Buy, Sell, Or Hold?

Micron is quite profitable today and will see its profits rise further going forward. Shares are not looking expensive today at all, being valued at just 8x next year's net profits. Cash flows should improve, which opens up the possibility for more ambitious shareholder returns in the future, although we do not yet know what the company's next CFO (not yet announced) aims for in that regard.

 

Micron은 오늘날 상당히 수익성이 있으며 앞으로 더 많은 이익이 증가할 것입니다.

현재 주가는 전혀 비싸 보이지 않고 내년 순이익의 8배에 불과합니다. 현금 흐름이 개선되어 향후 더 야심찬 주주 수익의 가능성이 열릴 것이지만, 이와 관련하여 회사의 차기 CFO(아직 발표되지 않음)가 무엇을 목표로 하는지는 아직 모릅니다.

 

Micron has, I believe, a solid upside of 10%+ over the next year. At the same time, shares are not as outrageously cheap as they were last fall when they were trading at less than $70, thus the risk-reward picture has worsened to some degree.

 

마이크론은 내년에 10% 이상의 견고한 상승 여력을 가지고 있다고 생각합니다. 동시에, 주가는 지난 가을 70달러 미만에서 거래되었을 때만큼 터무니없이 저렴하지 않기 때문에 위험 보상 상황이 어느 정도 악화되었습니다

 

We called Micron a Buy last fall, but since shares have returned 30% since then, we are somewhat less bullish today. Overall, I do believe that Micron is still a very solid investment, but waiting for a more opportune entry point could pay off, as MU is currently trading pretty close to the 52-week high.

우리는 지난 가을에 Micron을 매수라고 불렀지만 그 이후로 주가가 30% 수익률을 기록했기 때문에 오늘날 우리는 다소 덜 낙관적입니다. 전반적으로, 나는 Micron이 여전히 매우 견고한 투자라고 생각하지만 MU가 현재 52주 최고가에 매우 근접하게 거래되고 있기 때문에 더 적절한 진입점을 기다리는 것이 보상을 받을 수 있습니다.

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