Analyst Christopher Danely from Citi reiterated a Buy rating on Microchip (MCHP – Research Report) and increased the price target to $55.00 from $50.00.
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Christopher Danely has given his Buy rating due to a combination of factors, primarily highlighting Microchip’s strong revenue guidance and potential for significant growth post-economic downturn. The company reported a robust quarter with an 8% quarter-over-quarter revenue growth forecast for the June quarter, which is the highest within the analyst’s coverage universe. This growth is attributed to a broad-based strength and inventory replenishment following a substantial decline in sales.
Additionally, Danely notes that Microchip’s guidance indicates a potential for the highest earnings per share growth once the economy recovers. Despite a slight miss in gross margin expectations, the overall positive outlook has led to an increase in sales and EPS estimates for the upcoming fiscal years. Consequently, Danely has raised the target price for Microchip’s stock, reflecting confidence in the company’s ability to outperform its peers in the near future.
In another report released today, Raymond James also maintained a Buy rating on the stock with a $65.00 price target.