CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We maintain our 12-month target at $80 based on 18x P/E our CY 25 EPS view of $4.45, below peers to reflect more leveraged balance sheet. We lower our FY 24 (Mar.) EPS to $4.92 from $5.39 and FY 25 to $3.58 from $4.77. We start FY 26 at $4.60. MCHP posts Dec-Q EPS of $1.08 vs. $1.56, beating the $1.04 consensus. Sales fell 22% from Sep-Q (-19% Y/Y) and MCHP guided for additional declines in Mar-Q, as it contends with customers sharply curtailing inventories amid end-demand softness. Although we remain cautious about the trajectory of a recovery, we think MCHP is doing a good job cutting operating expenses (-12% from Sep-Q), planning 2-week shutdowns in both Mar-Q and Jun-Q, while lead times have been reduced to under 8 weeks. We are encouraged by debt reduction (-$392M with net debt/EBITDA at 1.27x) but see gross margin compression (60% in Mar-Q from 63.8% in Dec-Q), hurt by lower utilization. DIOs stand at 185, up 18 days, as internal inventories are excessive (rising to 225-230 days in Mar-Q).