Microchip Technology (NASDAQ:MCHP) Stock Price Down 10% on Analyst Downgrade

Microchip Technology Incorporated (NASDAQ:MCHP) traded down 10% during mid-day trading on Friday after KeyCorp lowered their price target on the stock from $135.00 to $120.00. KeyCorp currently has an overweight rating on the stock. Microchip Technology traded as low as $60.40 and last traded at $58.38. 4,340,023 shares changed hands during trading, a decline of 58% from the average session volume of 10,342,704 shares. The stock had previously closed at $64.85.

Other research analysts also recently issued reports about the company. Needham & Company LLC dropped their price target on Microchip Technology from $120.00 to $85.00 and set a “buy” rating on the stock in a research report on Friday. B. Riley Financial lowered their price objective on shares of Microchip Technology from $108.00 to $98.00 and set a “buy” rating on the stock in a research note on Thursday, October 22nd. UBS Group reaffirmed a “buy” rating and set a $120.00 target price (down from $130.00) on shares of Microchip Technology in a research report on Friday, August 7th. Citigroup dropped their target price on shares of Microchip Technology from $113.00 to $95.00 and set a “buy” rating on the stock in a research report on Friday, August 7th. Finally, TD Cowen reduced their price objective on Microchip Technology from $90.00 to $75.00 and set a “hold” rating for the company in a research report on Monday, October 19th. Three analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating and eight have given a Hold rating to the company’s stock. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average price target of $95.33.

Insider Activity

In related news, CFO James Bjornholt sold 4,112 shares of the company’s stock in a transaction dated Tuesday, August 25th. The shares were sold at an average price of $75.32, for a total transaction of $309,715.84. Following the transaction, the chief financial officer owned 28,573 shares in the company, valued at $2,152,118.36. This represents a 12.58% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.79% of the stock is owned by corporate insiders.

More Microchip Technology News

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Fiscal Q2 earnings were $0.97 per share, above the $0.94 consensus, while revenue of $1.62 billion also topped estimates and rose 42.2% year over year. Article: Microchip Technology Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Several firms still maintain bullish ratings despite reducing their targets: Susquehanna and Cantor Fitzgerald rate MCHP positive/overweight, while Needham and Rosenblatt retain buy ratings. Their revised targets remain above the $64.85 reference price. Article: Analysts Slash Their Forecasts After Q2 Results
• Neutral Sentiment: The company declared a quarterly dividend of $0.455 per share, equivalent to $1.82 annually; the dividend provides income but is unlikely to offset concerns about the outlook.
• Negative Sentiment: December-quarter guidance is the key concern: Microchip forecast revenue ranging from a 3% decline to 1% growth and non-GAAP EPS of $0.87–$0.95, with the guidance midpoint below analyst expectations. Article: Microchip Expects December-Quarter Revenue to Decline 3% to Grow 1%
• Negative Sentiment: Analysts cut price targets after the results, including Susquehanna ($120 to $100), Cantor Fitzgerald ($125 to $100), Needham ($120 to $85), Rosenblatt ($120 to $115), and Evercore ISI ($117 to $75). The cuts signal a more cautious outlook, even where firms maintained favorable ratings. Article: Evercore ISI Adjusts Price Target

Hedge Funds Weigh In On Microchip Technology

Large investors have recently made changes to their positions in the company. State Street Corp grew its holdings in Microchip Technology by 2.9% during the 2nd quarter. State Street Corp now owns 28,851,673 shares of the semiconductor company’s stock worth $2,631,273,000 after acquiring an additional 821,147 shares during the period. Van ECK Associates Corp lifted its stake in shares of Microchip Technology by 18.3% in the 2nd quarter. Van ECK Associates Corp now owns 8,224,808 shares of the semiconductor company’s stock valued at $750,102,000 after purchasing an additional 1,272,838 shares during the period. Artemis Wealth Advisors LLC acquired a new position in shares of Microchip Technology in the 2nd quarter valued at $541,413,000. Barrow Hanley Mewhinney & Strauss LLC acquired a new position in shares of Microchip Technology in the 2nd quarter valued at $537,423,000. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its position in shares of Microchip Technology by 23.5% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 5,060,528 shares of the semiconductor company’s stock worth $461,520,000 after purchasing an additional 962,362 shares during the last quarter. Institutional investors and hedge funds own 91.51% of the company’s stock.

Microchip Technology Price Performance

The company has a debt-to-equity ratio of 0.83, a quick ratio of 1.11 and a current ratio of 1.92. The company has a 50-day moving average price of $75.19 and a 200-day moving average price of $79.48. The firm has a market capitalization of $30.37 billion, a P/E ratio of 83.98, a price-to-earnings-growth ratio of 0.52 and a beta of 1.84.

Microchip Technology (NASDAQ:MCHP) last released its quarterly earnings data on Thursday, November 5th. The semiconductor company reported $0.97 EPS for the quarter, beating analysts’ consensus estimates of $0.94 by $0.03. Microchip Technology had a return on equity of 14.97% and a net margin of 9.34%. The business had revenue of $1.62 billion during the quarter, compared to the consensus estimate of $1.61 billion. During the same quarter in the prior year, the company posted $0.35 earnings per share. The firm’s revenue was up 42.2% on a year-over-year basis. On average, sell-side analysts predict that Microchip Technology Incorporated will post 3.20 earnings per share for the current year.

Microchip Technology Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, December 8th. Stockholders of record on Monday, November 23rd will be given a dividend of $0.4550 per share. This represents a $1.82 annualized dividend and a dividend yield of 3.3%. The ex-dividend date is Monday, November 23rd. Microchip Technology’s payout ratio is presently 271.64%.

About Microchip Technology

Microchip Technology Incorporated (NASDAQ:MCHP) develops and manufactures semiconductor products used in embedded control and connected electronic systems. Its portfolio includes microcontrollers, microprocessors, analog and power-management devices, memory products, timing and connectivity components, security solutions, and field-programmable gate arrays. The company also provides development tools, software, evaluation kits, and technical support to help customers design and produce electronic equipment.

Microchip’s products are used across a range of markets, including automotive, industrial, aerospace and defense, communications, consumer electronics, data centers, and medical applications.