Evercore ISI maintains outperform rating on Microchip Technology stock

Published 02/06/2025, 10:46
Evercore ISI maintains outperform rating on Microchip Technology stock

On Monday, Evercore ISI analysts reaffirmed their Outperform rating and maintained a $69.00 price target for Microchip Technology stock (NASDAQ: NASDAQ:MCHP). This aligns with the broader analyst consensus, with targets ranging from $50 to $75 per share. This decision follows a series of investor meetings hosted with the company’s CEO, Steve Sanghi, and Head of Investor Relations, Sajid Daudi.

During these meetings, CEO Steve Sanghi expressed optimism about the company’s business trends, highlighting potential opportunities for margin expansion beyond its current 56% gross margin and emphasizing Microchip Technology’s competitive position in both the U.S. and China. The company’s strong financial health is evidenced by its current ratio of 2.59, indicating ample liquidity to meet short-term obligations. The company’s standing with customers was also noted as a positive factor.

Evercore ISI analysts stated that the March 2025 quarter marked the bottom of Microchip Technology’s cycle, reinforcing their view of the company as a top pick. Their earnings per share (EPS) estimates for 2025 and 2026 are significantly above the consensus, by 32% and 65% respectively.

The reaffirmed rating and price target reflect the analysts’ increased confidence in Microchip Technology’s future performance and strategic positioning in the semiconductor industry.

In other recent news, Microchip Technology has updated its financial outlook, signaling a positive shift in its business trajectory. The company reported fiscal fourth-quarter 2025 revenue of $970.5 million, exceeding analysts’ expectations and providing an optimistic revenue forecast for the first quarter of fiscal 2026 at $1.045 billion. This forecast surpasses the consensus estimate of $980.0 million and suggests a 7.7% sequential increase. Stifel analysts have responded by raising their price target for Microchip to $70, citing strong company performance and a favorable book-to-bill ratio of 1.07. UBS also increased its price target to $65, maintaining a Buy rating, emphasizing the potential benefits from channel normalization and a recovery in the industrial sector.

Meanwhile, Truist Securities maintained a Hold rating on Microchip with a $52 price target, noting the company’s strong product range and improved shareholder returns through dividends and share repurchases. In product development, Microchip introduced the MEC175xB family of quantum-resistant controllers, aligning with NSA guidelines for enhanced security. These developments reflect Microchip’s strategic efforts to address both financial and technological advancements in its operations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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