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On Wednesday, analysts at Citi raised the price target for Monolithic Power Systems (NASDAQ: NASDAQ:MPWR) stock to $785 from the previous target of $700, while maintaining a Buy rating. Currently trading at $685.76, the stock has seen 9 analysts revise their earnings estimates upward for the upcoming period, according to InvestingPro data. This decision follows a meeting with the company’s management during Citi’s annual Silicon Valley Bus Tour.
Citi analysts met with Monolithic Power Systems’ CFO Bernie Blegen and Head of Investor Relations Tony Balow. The discussions revealed a cautiously optimistic outlook for the company’s Enterprise business, which accounts for 25% of sales, and a confident stance on the Auto Business, making up 23% of sales. The company’s strong financial position is reflected in its "GREAT" financial health score from InvestingPro, supported by impressive revenue growth of 30.57% over the last twelve months.
The analysts noted that recent positive data points in the Analog sector from companies like ADI, MCHP, and ON could benefit Monolithic Power Systems. This positive sentiment contributed to the decision to adjust the price target upwards.
Monolithic Power Systems is anticipated to experience a content-driven ramp in its Auto Business, which has further fueled confidence among Citi analysts. The company’s management remains optimistic about the potential growth in the second half of 2025.
Citi’s revised price target reflects their updated estimates and the belief that Monolithic Power Systems is well-positioned to capitalize on favorable market conditions in the Analog sector.
In other recent news, Monolithic Power Systems reported first-quarter 2025 earnings that exceeded analyst expectations, with an earnings per share (EPS) of $4.04, surpassing the forecasted $4.00. The company also achieved record quarterly revenue of $637.6 million, marking a 39.2% year-over-year increase, and exceeding projections of $631.16 million. Looking ahead, Monolithic Power Systems anticipates continued growth in its enterprise data segment, with significant revenue expected in the second half of 2025. Citi analysts maintained a Buy rating on Monolithic Power Systems, raising the price target to $700 from $615, reflecting confidence in the company’s future prospects. The company’s strategic transformation from silicon-only solutions to comprehensive modular systems is underway, with expansions in manufacturing and R&D centers outside China to mitigate geopolitical risks. Monolithic Power Systems is also focusing on high-margin product development, which aligns with its ongoing growth strategy. Despite these positive developments, the company’s gross margin expectations fell slightly short, and its stock experienced a decline in after-hours trading. Investors will be closely monitoring the company’s performance in the coming months, particularly in the enterprise data and automotive segments.
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