Microchip Technology (NASDAQ:MCHP) Price Target Cut to $75.00 by Analysts at Citigroup

Key Points

• Citigroup cut its Microchip Technology price target from $95 to $75 but maintained a Buy rating; the new target implies 28.53% upside from the stock’s price at the time of the report.
• Several other analysts also lowered their targets, though most kept Buy or positive ratings. The stock had a consensus Moderate Buy rating and an average price target of $91.95.
• Microchip beat quarterly earnings and revenue estimates, with revenue up 42.2% year over year, but its next-quarter earnings outlook fell short of expectations and supply constraints and rising costs remain risks.

Microchip Technology (NASDAQ:MCHP - Get Free Report) had its price objective reduced by equities researchers at Citigroup from $95.00 to $75.00 in a report issued on Friday, Benzinga reports. The brokerage currently has a "buy" rating on the semiconductor company's stock. Citigroup's target price would suggest a potential upside of 28.53% from the stock's current price.

Several other analysts have also recently commented on the stock. Susquehanna lowered their target price on shares of Microchip Technology from $120.00 to $100.00 and set a "positive" rating for the company in a research note on Friday. Rosenblatt Securities reduced their target price on Microchip Technology from $120.00 to $115.00 and set a "buy" rating on the stock in a research report on Friday. Needham & Company LLC decreased their price target on Microchip Technology from $120.00 to $85.00 and set a "buy" rating on the stock in a research note on Friday. Wells Fargo & Company lowered their price target on Microchip Technology from $80.00 to $70.00 and set an "equal weight" rating for the company in a report on Friday. Finally, Zacks Research cut Microchip Technology from a "strong-buy" rating to a "hold" rating in a report on Monday, August 17th. Three research analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and eight have assigned a Hold rating to the company's stock. According to MarketBeat.com, Microchip Technology currently has a consensus rating of "Moderate Buy" and a consensus price target of $91.95.

Microchip Technology Price Performance

NASDAQ:MCHP traded down $6.50 during trading hours on Friday, reaching $58.35. 46,545,487 shares of the company traded hands, compared to its average volume of 10,500,540. The firm's 50-day moving average is $75.19 and its 200-day moving average is $79.48. The stock has a market cap of $31.68 billion, a P/E ratio of 87.09, a P/E/G ratio of 0.52 and a beta of 1.84. The company has a debt-to-equity ratio of 0.83, a current ratio of 1.92 and a quick ratio of 1.11. Microchip Technology has a 1-year low of $48.52 and a 1-year high of $105.91.

Microchip Technology (NASDAQ:MCHP - Get Free Report) last posted its quarterly earnings data on Thursday, November 5th. The semiconductor company reported $0.97 EPS for the quarter, beating analysts' consensus estimates of $0.94 by $0.03. Microchip Technology had a return on equity of 14.97% and a net margin of 9.34%. The business had revenue of $1.62 billion for the quarter, compared to analyst estimates of $1.61 billion. During the same quarter last year, the company earned $0.35 earnings per share. The business's revenue for the quarter was up 42.2% compared to the same quarter last year. Equities research analysts expect that Microchip Technology will post 3.20 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other Microchip Technology news, CFO James Bjornholt sold 4,112 shares of the business's stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $75.32, for a total transaction of $309,715.84. Following the completion of the sale, the chief financial officer directly owned 28,573 shares in the company, valued at $2,152,118.36. The trade was a 12.58% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.79% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Microchip Technology

Hedge funds and other institutional investors have recently made changes to their positions in the business. Apella Capital LLC lifted its stake in Microchip Technology by 4.8% during the second quarter. Apella Capital LLC now owns 2,669 shares of the semiconductor company's stock valued at $225,000 after purchasing an additional 122 shares during the last quarter. Bridgewater Advisors Inc. boosted its holdings in Microchip Technology by 4.2% during the second quarter. Bridgewater Advisors Inc. now owns 3,331 shares of the semiconductor company's stock worth $304,000 after buying an additional 133 shares in the last quarter. Total Wealth Planning & Management Inc. boosted its holdings in Microchip Technology by 3.5% during the second quarter. Total Wealth Planning & Management Inc. now owns 4,225 shares of the semiconductor company's stock worth $385,000 after buying an additional 141 shares in the last quarter. Texas Capital Bank Wealth Management Services Inc grew its position in Microchip Technology by 2.0% in the second quarter. Texas Capital Bank Wealth Management Services Inc now owns 7,513 shares of the semiconductor company's stock worth $685,000 after buying an additional 144 shares during the last quarter. Finally, Greenleaf Trust grew its position in Microchip Technology by 0.6% in the second quarter. Greenleaf Trust now owns 24,163 shares of the semiconductor company's stock worth $2,204,000 after buying an additional 151 shares during the last quarter. Institutional investors and hedge funds own 91.51% of the company's stock.

Key Stories Impacting Microchip Technology

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Fiscal Q2 earnings of $0.97 per share topped the $0.94 consensus, while revenue of $1.62 billion also beat estimates and rose 42.2% year over year. Management cited recovering industrial and data-center demand. Microchip Q2 earnings and revenue beat estimates
• Positive Sentiment: The company declared a quarterly dividend of $0.455 per share, equivalent to $1.82 annualized. Microchip announces fiscal Q2 results
• Negative Sentiment: December-quarter guidance is the main headwind: revenue is forecast to be down 3% to up 1% sequentially, with non-GAAP EPS of $0.87–$0.95; the earnings midpoint was below analyst expectations. Supply constraints and rising costs also pose near-term risks. Earnings call highlights supply constraints and growth
• Negative Sentiment: Several firms lowered price targets after the results, including Truist, which cut its target to $62 and moved to a Hold rating. Other firms also reduced targets, even where they retained Buy or Overweight ratings—signaling more cautious estimates despite the quarterly beat. Analysts slash forecasts after Q2 results

Microchip Technology Company Profile

Microchip Technology Incorporated NASDAQ: MCHP develops and manufactures semiconductor products used in embedded control and connected electronic systems. Its portfolio includes microcontrollers, microprocessors, analog and power-management devices, memory products, timing and connectivity components, security solutions, and field-programmable gate arrays. The company also provides development tools, software, evaluation kits, and technical support to help customers design and produce electronic equipment.

Microchip's products are used across a range of markets, including automotive, industrial, aerospace and defense, communications, consumer electronics, data centers, and medical applications.

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