Microchip upgraded to Neutral at BofA on sales inflection, cost cuts

As previously reported, BofA upgraded Microchip (MCHP) to Neutral from Underperform with a price target of $56, up from $44. The return of well-regarded prior CEO Steve Sanghi has “greatly enhanced the level of restructuring urgency and customer/product focus” at Microchip, says the analyst following beat/raise earnings. However, the firm refrains from being more positive as the 50-60% peak-trough correction remains the deepest in the industry and it’s unclear if all of the prior EPS power is recoverable without some high-velocity macro recovery, the analyst tells investors.