Microchip Technology (MCHP) PT Lowered to $96 at Needham & Company

Needham & Company analyst Rajvindra Gill lowered the price target on Microchip Technology (NASDAQ: MCHP) to $96.00 (from $100.00) while maintaining a Buy rating.

The analyst commented, "Following NXPI's negative pre-announcement on April 6th, we are further reducing our estimates (greater % than we cut last week) on our analog/MCU suppliers. Our sensitivity analysis displayed a range of declines in auto/industrial in the 10%-50% range. Previously, we cut revenue on average 15% for '20. However, we think the order cuts could be closer to 30-50% across automotive/industrial as vehicle production is at standstill in Europe and U.S. Auto/industrial accounts for ~46% of sales. As such, for FY21 (March'21), we are now 16% below the Street on revenue and 30% below on EPS. Despite N-T volatility, we think CY21 could shape up to be a recovery year and the share prices have discounted much of this reality, in our view (-30% YTD). We maintain our Buy on L-T secular growth drivers in ADAS, data center and gross margin leverage."

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