Microchip Technology (MCHP) PT Raised to $140 at Needham & Company

Needham & Company analyst Rajvindra Gill raised the price target on Microchip Technology (NASDAQ: MCHP) to $140.00 (from $130.00) while maintaining a Buy rating.

The analyst commented, "We are raising our PT to $140 (vs. $130) as MCHP delivered a solid quarter and guide with consistent strength across the data center and early signs of a recovery in auto and industrial. We could envision an optimistic scenario where we see an inventory restocking, given the historical low levels of distribution inventory, combined with genuine demand pull through driven by data center, ADAS, industrial IoT and 5G. While lead times may extend, we do think MCHP has built enough capacity to support a return in demand. In that environment, we believe revenue could return to pre-downturn levels and grow from there. Moreover, we believe MCHP is on track to hit its LT GM target of 63% (vs. 61.7% MRQ) as the $16MM underutilization charges roll-off the P&L. Net, we see upside at current levels as we roll out our new FY22 Non-GAAP estimates."

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