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Research Alert: CFRA Maintains Hold Opinion On Shares Of Microchip Technology Incorporated
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Research Alert: CFRA Maintains Hold Opinion On Shares Of Microchip Technology Incorporated
Aug 8, 2025 6:07 AM

08:40 AM EDT, 08/08/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our 12-month target price to $68 (from $60), shifting to a P/E of 20x our CY 27 EPS estimate of $3.40, which assumes a more normalized mid-cycle EPS run rate. The multiple is near historical levels, but MCHP's elevated debt levels ($4.9B net debt) keep its valuation below that of comparable analog peers. After posting Jun-Q results slightly ahead of our expectations, we raise our FY 26 (Mar.) EPS estimate to $1.46 (from $1.39) but temper FY 27 to $2.62 (from $2.79). Although we think the cyclical recovery is taking place, albeit off of depressed levels, we remain concerned about the trajectory of the upturn (could be more L-shaped than U-shaped). Still, we are impressed by MCHP's ability to more quickly right-size the business model after prior missteps. Specifically, efforts to reduce bloated inventories are paying off, with inventory days now at 214, down from 251 in the Mar-Q and 266 in the Dec-Q (seen dropping to a range of 195 to 200 days in Sep-Q; still well off the 130 to 150 days target).

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