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Investing.com - TD Cowen has reduced its price target on Microchip Technology (NASDAQ:MCHP) to $60.00 from $75.00 while maintaining a Hold rating on the stock. The new target aligns with InvestingPro’s analysis, which indicates the stock is currently trading above its Fair Value, with a market capitalization of $35.7 billion.
The firm cited Microchip’s latest financial results, which showed a beat and modest raise that aligned with industry peers but likely disappointed investors who had anticipated a stronger recovery. The company’s revenue declined 42.4% in the last twelve months, though analysts expect profitability to improve this year.
TD Cowen noted that while bookings and demand trends are showing favorable movement for the semiconductor company, underutilization charges and inventory write-downs continue to negatively impact gross margins.
The analyst report indicated that Microchip’s gradual recovery, rather than a sharp rebound, contributed to the decision to lower the price target by $15.
TD Cowen remains sidelined on Microchip Technology stock due to macroeconomic uncertainty, limited visibility into revenue and gross margin trajectories, and what the firm considers to be fair current valuation.
In other recent news, Microchip Technology reported its first-quarter fiscal year 2026 earnings, surpassing analyst expectations. The company achieved an earnings per share of $0.27, exceeding the forecasted $0.24, and reported revenue of $1.08 billion, which was higher than the anticipated $1.05 billion. Following these results, Needham raised its price target for Microchip Technology to $77.00 from $66.00, maintaining a Buy rating, citing an improving demand environment in the semiconductor sector. Additionally, Morgan Stanley (NYSE:MS) increased its price target on the company to $63.00 from $61.00, while keeping an Equalweight rating. Morgan Stanley highlighted that Microchip’s quarter-over-quarter revenue growth for the June quarter was the highest among its peers this earnings season. However, the guidance for September was noted to be just in line with market expectations. These developments reflect recent changes and analyst assessments of Microchip Technology’s performance and market position.
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