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Headquartered in Chandler, Arizona, Microchip Technology Incorporated (MCHP) specializes in designing, manufacturing, and selling smart, connected, and secure embedded control solutions. With a market cap of $40 billion, the company operates across the Americas, Europe, and Asia.
The semiconductor giant has significantly underperformed the broader market over the past year. Over the past 52 weeks, MCHP stock has plunged 1.8% compared to the S&P 500 Index’s ($SPX) 32.7% returns. In 2024 alone, MCHP stock dipped 16.7%, while SPX returned 21.2% on a YTD basis.
MCHP has also lagged behind the First Trust Nasdaq Semiconductor ETF’s (FTXL) 33.8% returns over the past 52 weeks and a 10.3% returns in 2024.
On Nov. 5, MCHP reported its fiscal 2025 second-quarter earnings, and its shares rose marginally. It reported an adjusted EPS of 46 cents per share, beating analysts' expectations of 43 cents. Revenue reached $1.16 billion, slightly above the forecasted $1.15 billion.
For the current quarter, the company expects earnings of 25 to 35 cents per share and revenue between $1.02 billion and $1.1 billion.
For the current fiscal year, ending in March 2025, analysts expect Microchip Technology's EPS to decline 62.4% annually to $1.73. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in three of the past four quarters while missing the forecasts on another occasion.
Nevertheless, among the 22 analysts covering the MCHP stock, the consensus rating is a “Strong Buy,” a step up from “Moderate Buy” three months ago. That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
This configuration is slightly less bullish than two months ago, with 16 analysts recommending a “Strong Buy.”
On Oct. 21, Susquehanna Community Financial, Inc. (SQCF) lowered its price target for MCHP from $105 to $95 but maintained a “Positive” rating. The firm previewed Q3 semiconductor results, expecting headwinds, especially in the Automotive and Industrial segments, as momentum slowed in late summer.
MCHP’s mean price target of $93.32 represents a premium of 24.3% to current price levels. The Street-high target of $110 indicates a potential upside of 46.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
