UPDATE: Stifel Upgrades Microchip Technology (MCHP) to Buy, Nearing Trough Multiple
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Stifel analyst Tore Svanberg upgraded Microchip Technology (NASDAQ: MCHP) from Hold to Buy with a price target of $75.00 (from $70.00).
The analyst commented, "MCHP’s stock is down -31% as of 6/27/22 relative to its peak on 1/4/22 (vs. down -45% in 2020). On a relative basis, this compares to the -24% average decline from our large cap peer group including TXN, NXPI, ADI, ON, and MCHP (vs. -39% in 2020). Interestingly, when compared to the 2008 crisis, while MCHP remains a more defensive name having proved more resilient at -54% returns (vs. -60% large-cap returns on average), it appears that now MCHP is relatively underperforming in the current environment."
"As of 6/27/22, MCHP is trading at a 9.8x P/E on CY23 NG EPS (vs. 8.4x in 2020). This valuation multiple is nearing the lowest MCHP has traded in the past five years, with the lowest P/E multiple of 8.1x on 10/26/18. On average, MCHP traded at ~15.0x P/E over the past five years (from 2017 to 2022)."
Shares of Microchip Technology closed at $60.67 yesterday.
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