Stifel maintains Buy on Microchip shares, target steady at $70

Published 30/05/2025, 14:24
Stifel maintains Buy on Microchip shares, target steady at $70

On Friday, Stifel analysts maintained a Buy rating on Microchip Technology (NASDAQ:MCHP) with a consistent $70.00 price target. The firm’s decision followed Microchip Technology’s announcement of increased financial guidance for the June quarter (F1Q26) after the market closed on Thursday. The analysts emphasized their confidence in the stock, reiterating the 12-month target price based on valuation multiples, including 8.6 times the expected enterprise value to sales (EV/Sales) for calendar year 2026 and 35.7 times the projected price to earnings (P/E) for the same period. According to InvestingPro data, the stock currently trades at $58.11, with analyst targets ranging from $50 to $75.

Microchip Technology, a leading provider of microcontroller and analog semiconductors, updated its financial outlook, signaling a positive shift in its business trajectory. This revised guidance is significant as it may indicate the company’s improved operational performance and potentially heightened demand for its products. InvestingPro analysis reveals that 15 analysts have revised their earnings upwards for the upcoming period, and the company has maintained dividend payments for 24 consecutive years, currently offering a 3.13% yield.

The maintained $70.00 price target by Stifel reflects a detailed analysis of the company’s valuation. The target is derived from key industry metrics, suggesting that the analysts see a favorable risk-reward profile for Microchip Technology’s shares. Based on InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels, though the company maintains strong financial health with a current ratio of 2.59 and liquid assets exceeding short-term obligations. Get access to 10+ additional exclusive ProTips and comprehensive valuation metrics with InvestingPro.

Investors and shareholders of Microchip Technology are likely to monitor the company’s performance closely in the coming quarter, as the updated guidance could have implications for the stock’s movement in the near term.

Stifel’s reiteration of the Buy rating and price target provides a clear perspective on the firm’s view of Microchip Technology’s stock potential, based on the latest financial data and market conditions. As the June quarter progresses, market participants will be looking to see if the company’s performance aligns with the raised guidance and Stifel’s positive outlook.

In other recent news, Microchip Technology reported fiscal fourth-quarter 2025 earnings that exceeded analysts’ expectations, with revenue reaching $970.5 million. This figure, although a 5.4% decrease from the previous quarter, was 1.1% higher than Stifel’s estimate. Looking ahead, Microchip’s revenue guidance for the first quarter of fiscal 2026 is set at $1.045 billion, surpassing both Stifel’s projection and the consensus estimate. Stifel analysts, impressed by these results, raised their price target for Microchip to $70, maintaining a Buy rating.

Meanwhile, Truist Securities also adjusted its price target for the company to $52 while keeping a Hold rating, reflecting a cautious stance despite acknowledging the firm’s strong performance. In addition, TD Cowen raised its price target to $55, citing Microchip’s proactive measures to reduce inventory and focus on innovation. However, they maintained a Hold rating due to an uncertain macroeconomic environment.

On the product front, Microchip introduced the MEC175xB family of quantum-resistant controllers, aligning with NSA guidelines for enhanced security measures. These controllers feature advanced cryptographic algorithms and are designed to address potential quantum computing threats. These recent developments underscore Microchip Technology’s strategic initiatives and financial trajectory.

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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