In a report released today, Craig Ellis from B.Riley FBR reiterated a Buy rating on Microchip (NASDAQ: MCHP), with a price target of $135. The company’s shares opened today at $88.40.
Ellis said:
“Microchip Technology’s (MCHP) F1Q19 beat with a modest and more significant revenue and EPS beat and then guided to a mixed F2Q19 with meaningfully lower sales but much better EPS, the latter due to lower opex, interest expense, and tax. Shares slumped -7% AMC on revenue outlook disappointment, though we see an attractive opportunity with upside EPS potential in the near and longer term and +84% four-year growth from FY18’s $5.48 toward FY22’s $10.00. Negatives were two-fold—a $200M correction to previously excessive Microsemi shipments split $100M in F1Q and $50M each in F2Q&3Q, which weigh on near-term revenues, GM and EBITDA, plus four items hurting sales by 1-2% including constraint-related system builds push- outs, a still partial ZTE recovery, trade dispute concerns, and bitcoin controller mining leverage.”
According to TipRanks.com, Ellis is a top 25 analyst with an average return of 35.5% and a 77.6% success rate. Ellis covers the Consumer Goods sector, focusing on stocks such as Sequans Communications S A, Axcelis Technologies, and Silicon Laboratories.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Microchip with a $116.06 average price target, which is a 31.3% upside from current levels. In a report issued on July 27, Piper Jaffray also maintained a Buy rating on the stock with a $150 price target.
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Based on Microchip’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $35.7 million. In comparison, last year the company had a net profit of $171 million.
Based on the recent corporate insider activity of 81 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of MCHP in relation to earlier this year.
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Microchip Technology, Inc. engages in developing and manufacturing semiconductor products. It operates through the Semiconductor Products and Technology Licensing segments.
