Investors Purchase Large Volume of Call Options on Microchip Technology (NASDAQ:MCHP)

Key Points

• Unusual options activity: Traders purchased 27,279 call options on Microchip Technology, 56% above the average daily volume, signaling heightened interest in the stock.
• Analyst sentiment remains positive but mixed: The stock has a “Moderate Buy” consensus rating and a $99.76 average price target, although Wells Fargo and TD Cowen recently lowered their targets.
• Shares traded at $75.39 after rising 0.5%, while the company reported quarterly revenue growth of 35.1% and an earnings beat; it also pays a $1.82 annualized dividend yielding about 2.4%.

Microchip Technology Incorporated (NASDAQ:MCHP - Get Free Report) was the recipient of some unusual options trading on Friday. Traders bought 27,279 call options on the stock. This represents an increase of 56% compared to the average daily volume of 17,533 call options.

Analyst Ratings Changes

Several analysts recently weighed in on the stock. Wells Fargo & Company reduced their price objective on shares of Microchip Technology from $95.00 to $88.00 and set an "equal weight" rating on the stock in a research note on Monday, July 20th. TD Cowen decreased their price target on Microchip Technology from $105.00 to $90.00 and set a "hold" rating for the company in a research note on Monday, July 13th. Truist Financial raised their price objective on Microchip Technology from $69.00 to $105.00 and gave the stock a "hold" rating in a research report on Friday, May 8th. Barclays lifted their price objective on Microchip Technology from $80.00 to $105.00 and gave the stock an "equal weight" rating in a research note on Monday, May 11th. Finally, JPMorgan Chase & Co. increased their target price on shares of Microchip Technology from $95.00 to $120.00 and gave the company an "overweight" rating in a research report on Friday, May 8th. Four research analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and seven have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus price target of $99.76.

Microchip Technology Stock Up 0.5%

MCHP stock traded up $0.38 during trading on Friday, reaching $75.39. 4,165,891 shares of the stock were exchanged, compared to its average volume of 10,478,377. The firm's 50 day moving average is $89.25 and its 200 day moving average is $81.20. The firm has a market cap of $40.94 billion, a P/E ratio of 358.66, a price-to-earnings-growth ratio of 0.72 and a beta of 1.74. The company has a current ratio of 2.09, a quick ratio of 1.18 and a debt-to-equity ratio of 0.85. Microchip Technology has a twelve month low of $48.52 and a twelve month high of $105.91.

Microchip Technology (NASDAQ:MCHP - Get Free Report) last announced its quarterly earnings data on Thursday, May 7th. The semiconductor company reported $0.57 EPS for the quarter, beating analysts' consensus estimates of $0.50 by $0.07. Microchip Technology had a return on equity of 10.87% and a net margin of 4.88%.The firm had revenue of $1.31 billion during the quarter, compared to analysts' expectations of $1.26 billion. During the same quarter last year, the firm posted $0.11 earnings per share. The company's revenue for the quarter was up 35.1% compared to the same quarter last year. Microchip Technology has set its Q1 2027 guidance at 0.670-0.710 EPS. As a group, research analysts forecast that Microchip Technology will post 2.7 EPS for the current year.

Microchip Technology Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Friday, June 5th. Shareholders of record on Friday, May 22nd were paid a $0.455 dividend. This represents a $1.82 dividend on an annualized basis and a dividend yield of 2.4%. The ex-dividend date of this dividend was Friday, May 22nd. Microchip Technology's dividend payout ratio (DPR) is 866.67%.

Insider Activity

In other news, CFO James Eric Bjornholt sold 3,667 shares of the business's stock in a transaction dated Friday, May 22nd. The stock was sold at an average price of $90.87, for a total transaction of $333,220.29. Following the sale, the chief financial officer directly owned 28,573 shares in the company, valued at approximately $2,596,428.51. The trade was a 11.37% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Richard J. Simoncic sold 5,000 shares of the company's stock in a transaction that occurred on Thursday, June 4th. The shares were sold at an average price of $97.52, for a total value of $487,600.00. Following the completion of the transaction, the chief operating officer directly owned 130,508 shares of the company's stock, valued at $12,727,140.16. This represents a 3.69% decrease in their position. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 26,750 shares of company stock valued at $2,543,170. 1.79% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the business. EFG International AG acquired a new stake in shares of Microchip Technology in the 4th quarter worth about $29,000. Miller Capital Partners Inc. acquired a new position in Microchip Technology during the 4th quarter valued at about $29,000. Reflection Asset Management bought a new stake in Microchip Technology during the 4th quarter worth approximately $33,000. Garton & Associates Financial Advisors LLC purchased a new stake in shares of Microchip Technology in the fourth quarter worth approximately $33,000. Finally, Caitong International Asset Management Co. Ltd raised its stake in shares of Microchip Technology by 4,663.6% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 524 shares of the semiconductor company's stock worth $33,000 after purchasing an additional 513 shares during the last quarter. 91.51% of the stock is currently owned by institutional investors and hedge funds.

About Microchip Technology

Microchip Technology Inc is a semiconductor company headquartered in Chandler, Arizona, that designs, develops and supplies a broad portfolio of embedded control and analog semiconductors. Its product lineup centers on microcontrollers (including the well-known PIC family), digital signal controllers and associated development tools and software, along with a range of mixed-signal and analog devices, nonvolatile memory, power management, timing, interface, wireless and security products. The company also provides integrated hardware and software solutions intended to simplify embedded design and accelerate time to market for OEMs and contract manufacturers.

Microchip's products are used across a wide range of end markets, including automotive, industrial automation, consumer electronics, communications, aerospace and defense, and Internet of Things (IoT) applications.

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