Update shared on19 Sep 2025
Fair value Decreased 1.19%Analysts have slightly lowered Microchip Technology’s price target to $76.00, citing ongoing gross margin pressures from inventory charges and underutilization despite improved demand trends and mixed sector data.
Analyst Commentary
- Despite improved bookings and demand trends, underutilization charges and inventory write-downs are pressuring gross margins and limiting upside.
- Recent financial results were in line with peers but fell short of heightened investor recovery expectations.
- Industrial and automotive sector data are mixed but show signs of near-term improvement, supporting cautious optimism.
- Tariff-driven pull-ins are boosting short-term results, though concerns persist over sub-seasonal performance in the second half of the year and a slowdown in China, despite its resilience.
- Bullish analysts see strong cyclical upside, particularly as analog semiconductor industry shipments normalize, with well-managed supply chains and robust AI demand as key positives.
What's in the News
- China’s Ministry of Commerce has launched anti-discrimination and anti-dumping investigations into U.S. chip trade policy and analog chip imports, directly affecting companies like Microchip Technology (Reuters, 2025-09-15).
- The Trump administration plans to impose tariffs on semiconductor imports from companies not relocating production to the U.S., impacting Microchip and peers (Reuters, 2025-09-05).
- TD Cowen lowered Microchip’s price target to $60 from $75, citing ongoing underutilization charges and inventory write-downs weighing on gross margins, despite favorable booking and demand trends (2025-08-08).
- Microchip Technology recently reappointed a former CEO, making it the latest instance in a 10-year high of “boomerang CEO” appointments within the S&P 1500 (FT, 2025-07-28).
- The Trump administration intends to soon announce results of a national security investigation into semiconductor imports, which could have implications for Microchip and other industry peers (Reuters, 2025-07-27).
Valuation Changes
Summary of Valuation Changes for Microchip Technology
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $76.92 to $76.00.
- The Future P/E for Microchip Technology remained effectively unchanged, moving only marginally from 39.62x to 38.87x.
- The Net Profit Margin for Microchip Technology remained effectively unchanged, moving only marginally from 21.80% to 21.98%.
Disclaimer
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