Microchip: Accelerating Demand Recovery and Valuation Catch-Up Support Buy Rating and $83 Target

In a report released yesterday, Mark Lipacis from Evercore ISI maintained a Buy rating on Microchip, with a price target of $83.00.

Mark Lipacis has given his Buy rating due to a combination of factors tied to Microchip’s improving fundamentals and positioning in the current cycle. He underscores that management has twice lifted its quarterly revenue outlook in a short span, signaling demand is recovering faster than previously expected and that the rebound is broad across end markets. He also notes that order trends and backlog for the upcoming quarter are starting from a meaningfully stronger base, suggesting that reported results are likely to exceed initial guidance as more short-cycle, in-quarter orders convert to revenue. In his view, this pattern fits Microchip’s historical behavior at this stage of the cycle, where the company tends to guide cautiously and then raise expectations as the quarter progresses.

Lipacis further highlights that his revenue and earnings forecasts for 2026 are materially above the market consensus, reflecting his confidence in the strength and durability of the recovery. He believes that analog and microcontroller names in general should benefit from an inventory restocking phase that is gaining momentum, with Microchip particularly well placed to capture this upswing. Because the stock is trading well below its longer-term trend relative to peers, he sees more room for upside as fundamentals normalize. Taken together, these elements support his Buy recommendation and his $83 price target, as he expects both earnings outperformance and valuation catch-up over time.

In another report released today, Needham also maintained a Buy rating on the stock with a $77.00 price target.