Microchip Technology Incorporated (NASDAQ:MCHP) Rated as 'Moderate Buy' by Analysts

Microchip Technology Incorporated (NASDAQ:MCHP) has been given an average recommendation of "Moderate Buy" by the eighteen brokerage firms currently analyzing the stock, according to reports by MarketBeat. Among these analysts, one has suggested a sell rating, four have opted for a hold rating, and thirteen have expressed a buy recommendation for the technology company. The analysts also noted a 12-month average price target for the stock set at $85.00.

Recently, various financial institutions have updated their outlook on MCHP shares. For instance, Bank of America reclassified Microchip Technology from a "neutral" to an "underperform" rating, subsequently lowering their price target from $80.00 to $65.00 on December 16th. Similarly, Truist Financial downgraded the company’s rating from "buy" to "hold", reducing their target price from $89.00 to $80.00 in a report dated September 23rd.

The Goldman Sachs Group also adjusted their target price for Microchip Technology from $72.00 to $63.00 and maintained a "neutral" rating on January 10th. Within that timeframe, Evercore ISI reaffirmed an "outperform" rating but reduced their price target to $95.00 from $101.00 on November 6th. Citigroup also decreased their target price from $92.00 to $82.00, while keeping a "buy" rating for the stock on the same date.

Current Performance of Microchip Technology

As of the opening on Friday, MCHP shares were priced at $57.97. The stock’s 50-day and 200-day simple moving averages are $61.11 and $73.71, respectively. Over the past year, Microchip Technology has seen a low of $54.47 and a high of $100.57. The company's market capitalization stands at $31.13 billion with a P/E ratio of 40.54 and a beta of 1.52. The current ratio for the company is 0.88, the quick ratio is 0.48, and their debt-to-equity ratio is 0.71.

On November 5th, Microchip Technology released its earnings results for the last quarter, reporting earnings per share at $0.46, surpassing the analysts’ average estimate of $0.43 by $0.03. The company's net profit margin was recorded at 14.22%, with a return on equity of 19.47%. They reported quarterly revenue of $1.16 billion, slightly higher than analysts' forecast of $1.15 billion. Compared to the same period last year, there was a significant revenue decline of 48.4%, while analysts predict that Microchip Technology will achieve an EPS of 1.32 for the current fiscal year.

Recent Dividend Increase

Furthermore, Microchip Technology announced an increase in its quarterly dividend, which was distributed on December 6th. Shareholders who were registered by November 22nd received a dividend of $0.455, leading to an annualized dividend of $1.82, resulting in a dividend yield of 3.14%. The ex-dividend date was also November 22nd. This recent increase from $0.45 represents a significant adjustment in their dividend policy, with the payout ratio currently at 127.27%.

Institutional Investors Activity

Recently, several large institutions have made changes to their holdings in Microchip Technology. For instance, Prospera Private Wealth LLC purchased a new share in the third quarter valued at approximately $29,000. Similarly, Peterson Financial Group Inc. and Truvestments Capital LLC both acquired new positions in the same quarter, each worth around $34,000. Additionally, Wolff Wiese Magana LLC increased its stake in the company by 55.2% during the third quarter, now holding 613 shares valued at $49,000 after acquiring more shares last quarter. Moreover, Hobbs Group Advisors LLC significantly boosted its ownership by 390.6%, owning 628 shares worth about $50,000 after purchasing an additional 500 shares in the last quarter. Overall, institutional investors control approximately 91.51% of Microchip Technology's stock.

About Microchip Technology

Microchip Technology Incorporated specializes in the development, manufacture, and sale of embedded control solutions that are smart, connected, and secure across the Americas, Europe, and Asia. Their product range includes various microcontrollers and microprocessors designed for automotive, industrial, computing, communication, lighting, power supplies, motor control, security, and connectivity applications.

Microchip, Stock, Analysts