Saturday, September 19, 2020

For Microchip Technology Incorporated [MCHP], Cowen sees a drop to $102. What next?

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Microchip Technology Incorporated [NASDAQ: MCHP] price plunged by -1.39 percent to reach at -$1.43. The company report on September 9, 2020 that Microchip Technology Narrows Financial Guidance for Second Quarter Fiscal 2021.

Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of smart, connected and secure embedded control solutions, today narrowed the range of its prior guidance for net sales and GAAP and non-GAAP earnings per share for its fiscal second quarter of 2021 ending September 30, 2020. Microchip previously provided guidance on August 4, 2020 for consolidated net sales to be flat to down 8% sequentially, with a midpoint of down 4%. Microchip now expects consolidated net sales for the September quarter to be down between 2% and 6% sequentially with an unchanged mid-point of down 4%. GAAP earnings per share is now expected to be between $0.23 and $0.31 and non-GAAP earnings per share is expected to be between $1.36 and $1.46. The original guidance provided on August 4, 2020 for GAAP earnings per share was $0.17 to $0.37 and the original guidance for non-GAAP earning per share was between $1.30 and $1.52. We are not able to estimate the amount of “Special Charges and Other Expense” or the amount of any gain or loss on our recently completed debt retirement and convertible debt exchange transactions, and therefore our estimate of GAAP earnings per share excludes any such amounts.

“The September 2020 quarter is tracking in line with our original expectations, allowing us to narrow our net sales and diluted earnings per share guidance after completing the first two months of the quarter,” said Steve Sanghi, Microchip’s CEO. “Our bookings activity has been strong in July and August allowing us to fill in the September quarter from a low backlog at the start of the quarter.”.

A sum of 3421209 shares traded at recent session while its average daily volume was at 2.56M shares. Microchip Technology Incorporated shares reached a high of $103.29 and dropped to a low of $100.84 until finishing in the latest session at $101.45.

The one-year MCHP stock forecast points to a potential upside of 14.88. The average equity rating for MCHP stock is currently 2.00, trading closer to a bullish pattern in the stock market.

Guru’s Opinion on Microchip Technology Incorporated [MCHP]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for MCHP shares is $119.19 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on MCHP stock is a recommendation set at 2.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Cowen have made an estimate for Microchip Technology Incorporated shares, keeping their opinion on the stock as Market Perform, with their previous recommendation back on August 05, 2020. While these analysts kept the previous recommendation, Loop Capital raised their target price to Buy. The new note on the price target was released on June 19, 2020, representing the official price target for Microchip Technology Incorporated stock. Previously, the target price had yet another raise from $81 to $109, while Morgan Stanley kept a Equal-Weight rating on MCHP stock. On June 03, 2020, analysts increased their price target for MCHP shares from 85 to 125.

The Average True Range (ATR) for Microchip Technology Incorporated is set at 3.50, with the Price to Sales ratio for MCHP stock in the period of the last 12 months amounting to 4.91. The Price to Book ratio for the last quarter was 4.57, with the Price to Cash per share for the same quarter was set at 1.49. Price to Free Cash Flow for MCHP in the course of the last twelve months was 20.51 with Quick ratio for the last quarter at 0.60.

MCHP Stock Performance Analysis:

Microchip Technology Incorporated [MCHP] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -9.70. With this latest performance, MCHP shares gained by 1.19% in over the last four-week period, additionally plugging by 38.22% over the last 6 months – not to mention a rise of 9.59% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for MCHP stock in for the last two-week period is set at 41.70, with the RSI for the last a single of trading hit 36.05, and the three-weeks RSI is set at 45.52 for Microchip Technology Incorporated [MCHP]. The present Moving Average for the last 50 days of trading for this stock 105.01, while it was recorded at 107.24 for the last single week of trading, and 96.22 for the last 200 days.

Insight into Microchip Technology Incorporated Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and Microchip Technology Incorporated [MCHP] shares currently have an operating margin of +13.15 and a Gross Margin at +42.63. Microchip Technology Incorporated’s Net Margin is presently recorded at +10.82.

Return on Total Capital for MCHP is now 4.50, given the latest momentum, and Return on Invested Capital for the company is 3.96. Return on Equity for this stock inclined to 10.50, with Return on Assets sitting at 3.19. When it comes to the capital structure of this company, Microchip Technology Incorporated [MCHP] has a Total Debt to Total Equity ratio set at 172.26. Additionally, MCHP Total Debt to Total Capital is recorded at 63.27, with Total Debt to Total Assets ending up at 55.21. Long-Term Debt to Equity for the company is recorded at 160.56, with the Long-Term Debt to Total Capital now at 58.97.

Reflecting on the efficiency of the workforce at the company, Microchip Technology Incorporated [MCHP] managed to generate an average of $31,700 per employee. Receivables Turnover for the company is 5.81 with a Total Asset Turnover recorded at a value of 0.29.Microchip Technology Incorporated’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.60 and a Current Ratio set at 0.80.

MCHP Stock EPS

With the latest financial reports released by the company, Microchip Technology Incorporated posted 1.43/share EPS, while the average EPS was predicted by analysts to be reported at 1.43/share. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for MCHP. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Microchip Technology Incorporated go to 7.00%.

Microchip Technology Incorporated [MCHP] Insider Position Details

There are presently around $25,442 million, in the hands of institutional investors. The top three institutional holders of MCHP stocks are: VANGUARD GROUP INC with ownership of 29,170,294, which is approximately -0.744% of the company’s market cap and around 2.20% of the total institutional ownership; DODGE & COX, holding 25,010,629 shares of the stock with an approximate value of $2.54 billion in MCHP stocks shares; and BLACKROCK INC., currently with $1.94 billion in MCHP stock with ownership of nearly 8.257% of the company’s market capitalization.

Positions in Microchip Technology Incorporated stocks held by institutional investors increased at the end of August and at the time of the August reporting period, where 354 institutional holders increased their position in Microchip Technology Incorporated [NASDAQ:MCHP] by around 14,375,679 shares. Additionally, 403 investors decreased positions by around 18,377,722 shares, while 119 investors held positions by with 218,028,191 shares. The mentioned changes placed institutional holdings at 250,781,592 shares, according to the latest SEC report filing. MCHP stock had 118 new institutional investments in for a total of 2,695,938 shares, while 75 institutional investors sold positions of 2,823,842 shares during the same period.

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