Bank of America has increased its price target for Microchip Technology (NASDAQ:MCHP) from $67.00 to $72.00 in a research note issued to investors on November 7, 2023. Despite this adjustment, the firm maintains a neutral rating on the semiconductor company’s stock. This revision comes as part of a broader trend among various equity analysts assessing Microchip’s market performance.
Several other financial institutions have also recently updated their evaluations of Microchip Technology. Cantor Fitzgerald lowered its target price from $70.00 to $65.00, while maintaining a neutral rating. Similarly, TD Cowen revised its price objective downwards from $65.00 to $60.00, also assigning a “hold” rating. On the other hand, Stifel Nicolaus adjusted its target from $82.00 to $75.00 and maintained a “buy” rating. Zacks Research downgraded Microchip Technology from a “strong-buy” to a “hold” rating earlier in August.
As of now, market analysts show a mixed sentiment towards the stock. One analyst has rated it as a strong buy, twelve have given it a buy rating, seven have issued a hold rating, and one has assigned a sell rating. According to MarketBeat.com, the consensus rating stands at “Moderate Buy,” with an average target price of $74.95.
Recent Earnings and Financial Performance
Microchip Technology recently announced its earnings for the quarter ending November 6, 2023. The company reported earnings per share (EPS) of $0.35, surpassing the consensus estimate of $0.33 by $0.02. The revenue for the quarter reached $1.14 billion, slightly above analyst expectations of $1.13 billion. Although this reflects a positive return on equity of 5.21%, the company experienced a net margin of -4.39% and a 2.0% decline in revenue compared to the same quarter last year.
Looking ahead, Microchip Technology has set guidance for the third quarter of fiscal year 2026, projecting EPS in the range of $0.340 to $0.400. Analysts anticipate the company will report an EPS of $1.03 for the current fiscal year.
Dividend Announcement and Insider Activity
In addition to its earnings report, Microchip Technology declared a quarterly dividend of $0.455 per share, scheduled to be paid on December 9, 2023. Shareholders on record as of November 24, 2023 will be eligible for the dividend, which translates to an annualized dividend of $1.82 and a yield of 2.8%. Notably, the company’s dividend payout ratio (DPR) stands at -404.44%.
In a recent insider transaction, CFO James Eric Bjornholt sold 4,292 shares of the company at an average price of $50.39, totaling approximately $216,273.88. Following this sale, he retained 30,089 shares valued at around $1,516,184.71, marking a 12.48% decrease in his ownership.
Institutional Investment Trends
Recent activity among institutional investors indicates a notable interest in Microchip Technology. Hedge funds have been actively adjusting their positions, with Winnow Wealth LLC acquiring a new stake valued at about $25,000 in the third quarter. Root Financial Partners LLC also purchased shares worth approximately $28,000, while MCF Advisors LLC increased its stake by 211.2%, now holding 473 shares worth $33,000 after additional purchases.
Additionally, Salomon & Ludwin LLC raised its position by 219.3%, owning 479 shares valued at $32,000 following recent acquisitions. Hedge funds and institutional investors collectively hold 91.51% of Microchip Technology’s stock.
Microchip Technology Incorporated specializes in developing and manufacturing embedded control solutions across the Americas, Europe, and Asia. The company offers a range of products, including 8-bit, 16-bit, and 32-bit mixed-signal microcontrollers, catering to various applications such as automotive, industrial, and communication sectors.
