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Chandler, Arizona-based Microchip Technology Incorporated (MCHP) develops, manufactures, and sells smart, connected, and secure embedded control solutions. With a market cap of $49.7 billion, the company's operations span various countries in the Americas, Europe, and Asia. It is expected to announce its Q1 earnings on Thursday, Aug. 1.
Ahead of the events, analysts expect Microchip Technology to report a profit of $0.46 per share, a decrease of 70.5% from $1.56 per share reported in the year-ago quarter. The company surpassed the consensus estimates once over the past four quarters, matched it twice, and missed it on another occasion. Despite industry-wide demand challenges, the company met the consensus EPS estimate in the most recent quarter due to effective cost management and operational efficiencies.
In fiscal 2024, analysts expect Microchip Technology to report an EPS of $2.35, down 48.9% from $4.60 in fiscal 2023. However, in its fiscal 2025, EPS is expected to grow 67.2% year over year to $3.93.
MCHP stock is up 2.1% over the past 52 weeks, substantially underperforming the S&P 500 Index’s ($SPX) 25.6% gains and the S&P 500 Technology Sector SPDR’s (XLK) 34.4% returns over the same time frame.
In the previous fiscal year, Microchip Technology reported a 9.5% drop in revenues and a 14.8% drop in net income. However, the company exceeded the market’s expectations, and its shares rose by 2.6% after the release of its Q4 and annual earnings on May 6. The company is heavily reliant on the Asian markets, which contributed to over half of its revenues in the previous fiscal year. Although the company saw an increase in revenue from the Americas and Europe, its sales in Asia fell by 20.6%, leading to an overall revenue fall.
However, over the past years, it has been consistent with dividend payouts, and it repurchased 11.9 million shares worth $982.1 million in the previous fiscal year.
The consensus opinion on Microchip Technology stock is bullish, with a “Strong Buy” rating overall. Out of the 22 analysts covering the stock,15 recommend a “Strong Buy,” one advises a “Moderate Buy,” and six suggest a “Hold” rating. This configuration is slightly more bullish than three months before, when 14 analysts suggested a "Strong Buy."
The average target price for Microchip Technology is $102, indicating a potential upside of 10.1% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
