Microchip price target raised to $125 from $90 at Raymond James

Raymond James analyst Melissa Fairbanks raised the firm’s price target on Microchip (MCHP) to $125 from $90 and keeps a Strong Buy rating on the shares. The quarter showed continued recovery, with inventory reductions across internal channels, distributors, and customers, alongside declining underutilization charges and extending lead times that signal improving demand consistent with broader analog industry trends, the analyst tells investors in a research note. While operating expenses are expected to rise as incentives normalize, gross margin expansion is expected to more than offset this, supporting EPS growth, and Microchip’s differentiated exposure to datacenter and aerospace/defense end markets further enhances its positioning for a stronger cyclical recovery with improving visibility into margin and earnings expansion over the coming quarters, the firm says.