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Investing.com - Piper Sandler raised its price target on Microchip Technology (NASDAQ:MCHP) to $80.00 from $65.00 on Friday, while maintaining an Overweight rating on the stock. According to InvestingPro data, the stock is currently trading above its Fair Value, with analyst targets ranging from $60 to $90.
The firm cited Microchip’s strong June quarter results and September quarter guidance, which showed slight upside in both revenues and earnings per share. Piper Sandler noted the company is experiencing broad strength across almost all product lines and geographic regions. InvestingPro analysis reveals that despite recent revenue challenges, analysts expect the company to return to profitability this year.
Microchip Technology’s gross margin has increased substantially from 52% in the March quarter to a projected 56% for the September quarter, with the company guiding for significant acceleration in leverage due to wafer start increases expected in December.
The improved margins reflect better operating results as Microchip boosts production, which reduces underutilization, while also reducing previously written-off inventory, according to Piper Sandler’s analysis.
The research firm acknowledged that while some investors might find the pace of recovery insufficient, it believes mid to longer-term investors "will be rewarded very nicely for their patience as this business turns around."
In other recent news, Microchip Technology reported its first-quarter fiscal 2026 results, surpassing analyst expectations. The company announced adjusted earnings per share of $0.27, exceeding the consensus estimate of $0.24. Revenue for the quarter was $1.08 billion, which also surpassed the analyst estimate of $1.05 billion. However, this revenue marked a 13.4% year-over-year decline, despite showing a sequential growth of 10.8%, indicating some recovery from the industry’s downturn. These results highlight the company’s ability to exceed projections, even amid challenges. Despite this, investor expectations were not fully met, as indicated by the market’s reaction. These developments are part of the broader landscape of recent corporate earnings reports.
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