Microchip Technology (NASDAQ:MCHP) has seen its price target increased from $67.00 to $72.00 by Bank of America in a research note issued to investors on Friday, marking a positive shift for the semiconductor company. Despite this adjustment, Bank of America maintains a neutral rating on the stock.
Several other financial institutions have also recently updated their evaluations of Microchip Technology. On the same day, Cantor Fitzgerald reduced its target price from $70.00 to $65.00, assigning a neutral stance on the stock. TD Cowen made a similar move, lowering its price objective from $65.00 to $60.00 while maintaining a hold rating. In contrast, Stifel Nicolaus set a buy rating but adjusted its target price down from $82.00 to $75.00.
On August 18, 2023, Zacks Research downgraded Microchip Technology from a strong-buy rating to a hold rating. Additionally, Citigroup revised its price target downward from $90.00 to $80.00, while still giving a buy rating for the stock. Currently, one analyst has rated the stock as a strong buy, twelve have a buy rating, seven have assigned a hold rating, and one has issued a sell rating. According to MarketBeat.com, the consensus rating stands at “Moderate Buy,” with a target price of $74.95.
Recent Performance and Earnings
Microchip Technology released its latest earnings results on November 6, 2023, reporting earnings per share of $0.35, surpassing the consensus estimate of $0.33 by $0.02. The company generated $1.14 billion in revenue for the quarter, slightly exceeding analyst projections of $1.13 billion. Despite these figures, revenue declined by 2.0% compared to the same quarter last year, where it reported earnings per share of $0.46.
Looking ahead, Microchip Technology has provided guidance for Q3 2026, estimating earnings per share between $0.340 and $0.400. Analysts are forecasting that the company will achieve earnings per share of $1.03 for the current fiscal year.
Dividend Announcement and Insider Transactions
In addition to the recent price target changes, Microchip Technology has also declared a quarterly dividend of $0.455 per share, scheduled for payment on December 9, 2023. Shareholders on record as of November 24, 2023 will qualify for this dividend, which translates to an annualized amount of $1.82 and a dividend yield of 2.8%. The ex-dividend date is also set for November 24.
Despite these announcements, the company’s dividend payout ratio stands at an unusual -404.44%, indicating that the dividend is being paid from other sources rather than profits.
In a related development, James Eric Bjornholt, the Chief Financial Officer, sold 4,292 shares of the company on November 25, 2023, at an average price of $50.39, amounting to a total transaction value of $216,273.88. Following this sale, he retains 30,089 shares valued at approximately $1,516,184.71.
Institutional Investment Trends
Recent movements in institutional investment have been notable. For instance, Winnow Wealth LLC acquired a new stake in Microchip Technology valued at around $25,000 in the third quarter. Similarly, Root Financial Partners LLC purchased a new position worth approximately $28,000.
Other firms have also increased their stakes, including MCF Advisors LLC, which grew its holdings by 211.2%, now owning 473 shares valued at $33,000. Salomon & Ludwin LLC also lifted its position by 219.3% in the third quarter.
Overall, hedge funds and other institutional investors now own about 91.51% of Microchip Technology’s stock, reflecting strong institutional confidence in the company’s future.
Microchip Technology, headquartered in the United States, specializes in the development and manufacturing of embedded control solutions that are secure and connected. The company offers a broad range of products, including microcontrollers and microprocessors for various applications, including automotive, industrial, and communications sectors.
This upward revision in price targets and the company’s recent performance provide a snapshot of Microchip Technology’s current market standing and potential growth trajectory amidst a competitive semiconductor landscape.
