Analysts Just Slashed Their Microchip Technology Incorporated (NASDAQ:MCHP) EPS Numbers

One thing we could say about the analysts on Microchip Technology Incorporated (NASDAQ:MCHP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the 24 analysts covering Microchip Technology provided consensus estimates of US$4.5b revenue in 2026, which would reflect a perceptible 4.7% decline on its sales over the past 12 months. Statutory earnings per share are supposed to tumble 43% to US$0.33 in the same period. Prior to this update, the analysts had been forecasting revenues of US$5.2b and earnings per share (EPS) of US$1.21 in 2026. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Microchip Technology

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to US$64.32.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.8% by the end of 2026. This indicates a significant reduction from annual growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. It's pretty clear that Microchip Technology's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Microchip Technology.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Microchip Technology's financials, such as the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other concern we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.