These are top 10 stocks traded on the Robinhood UK platform in July
Friday - Mizuho (NYSE:MFG) Securities has adjusted the price target for Microchip Technology (NASDAQ:MCHP) shares, reducing it to $58 from the previous $72, while retaining an Outperform rating on the stock. Currently trading near its 52-week low of $51.37, the $28.52 billion market cap company has seen five analysts revise their earnings estimates downward, according to InvestingPro data. The decision follows Microchip’s recent financial report, which showed December quarter revenue of $1.03 billion, slightly missing the consensus estimate of $1.06 billion. The company also projected a roughly 6% quarter-over-quarter decline in March quarter revenue to $1.06 billion.
The guidance provided by Microchip was contrasted with that of its peers. While companies like Allegro (WA:ALEP) MicroSystems and Texas Instruments (NASDAQ:TXN) have offered more positive outlooks, with quarter-over-quarter guidance up 4% and down 3% respectively, NXP Semiconductors (NASDAQ:NXPI) anticipated a steeper 9% decline. The analyst noted the general softness in the Analog and MCU market, which was reflected in Microchip’s guidance, as well as a days of inventory (DOI) level of approximately 266 days for the December quarter. Despite these challenges, InvestingPro analysis shows the company maintains strong fundamentals with a 60.32% gross profit margin, though revenue has declined 38.55% over the last twelve months.
In addition, the forecast for March quarter gross margin was set at 53%, which is 500 basis points below the consensus, indicating ongoing utilization challenges that could impact margins by approximately 500 basis points in the March quarter. Despite these headwinds, Mizuho highlighted Microchip’s significant product wins and customer re-engagement, which are critical for replenishing revenue pipelines.
Microchip has also signaled an increase in bookings on a quarter-over-quarter basis, but with limited visibility, suggesting a potential recovery in the second half of 2025. The company is preparing for a business update on March 3, where it plans to discuss inventory status, fabrication footprint rationalization, and strategic business roadmap. One bright spot for investors is the company’s consistent dividend policy, having raised dividends for 13 consecutive years. Mizuho remains optimistic about Microchip’s future performance, despite the present challenges, leading to the maintenance of the Outperform rating but with adjusted expectations and a lowered price target. For deeper insights into Microchip’s valuation and growth prospects, including exclusive Fair Value analysis and 12 additional ProTips, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Microchip Technology has been the focus of several developments. The company recently reported its fiscal Q3 results, which was followed by a downward adjustment of its stock target to $65 by Citi analysts, who nevertheless maintained a Buy rating for the company. Despite a reported 6% sequential sales decline, the analysts expressed confidence in Microchip’s ability to recover sales more rapidly than its competitors.
Microchip Technology also announced a rise in its quarterly dividend to 45.5 cents per share, marking a continuation of its trend of increasing dividends. This move is seen as part of the company’s commitment to delivering value to its shareholders.
Adding to the company’s recent activities, Victor Peng, former AMD (NASDAQ:AMD) president, has been appointed to Microchip’s Board of Directors. His extensive experience in the semiconductor industry is expected to contribute significantly to the company’s strategic direction.
Finally, Microchip Technology is set to elaborate on its 9-point transformation plan, a strategic initiative that has sparked optimism among investors and analysts alike. These are the latest developments in the ongoing story of Microchip Technology.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.