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Microchip Technology Incorporated (MCHP), headquartered in Chandler, Arizona, develops and manufactures microcontrollers, memory, and analog and interface products for embedded control systems. Valued at $50.98 billion by market cap, the company’s solutions service approximately 125,000 customers across industrial, automotive, consumer, aerospace and defense, communications, and computing markets.
Shares of this analog chipmaker have underperformed the broader market over the past year. MCHP has gained 23.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.6%. In 2024, MCHP stock is up 7%, compared to the SPX’s 11.3% rise on a YTD basis.
Zooming in further, MCHP’s underperformance looks more pronounced than Semiconductor iShares ETF (SOXX). The exchange-traded fund has gained about 58.1% over the past year. Moreover, the ETF’s 21.5% returns on a YTD basis outshine MCHP’s single-digit gains over the same time frame.
MCHP shares fell more than 1% after the company reported mixed Q4 results and guided Q1 net sales of between $1.22 billion and $1.26 billion, lower than the consensus of $1.34 billion. Since its earnings release on May 6, the stock has maintained an uptrend.
For the current fiscal year, ending in Mar. 2025, analysts expect MCHP to report an EPS decline of 48.3% to $2.38 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 21 analysts covering MCHP stock, the consensus rating is a “Strong Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly more bullish than three months ago, with 14 suggesting a “Strong Buy.”
Recently, Citigroup analyst Christopher Danely maintained a “Buy” rating on MCHP stock and raised the price target from $100 to $104, implying a potential upside of 7.8% from current levels.
The mean price target of $100.76 represents a 4.5% premium to MCHP’s current price levels. The Street-high price target of $115 suggests an upside potential of 19.2%.
On the date of publication, Dipanjan Banchur 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.
