Microchip Technology (MCHP) PT Raised to $120 at Needham

Needham analyst Rajvindra Gill raised the price target on Microchip Technology (NASDAQ: MCHP) to $120.00 (from $84.00) while maintaining a Buy rating.

The analyst commented: "Microchip reported F4Q26 results and provided F1Q27 outlook and both exceeded the Street's expectations. Our key takeaways include: 1) The strong results and outlook were driven by broad-based strength across all end markets. Book-to-bill in the quarter was well above 1.0, and bookings in April were the strongest in four years; 2) Microchip guided F1Q27 NG gross margin to 62.7% at the midpoint, >100bps ahead of the Street's estimate of 61.6%. Inventory reserve charges have normalized and are no longer a headwind to margins; and, 3) The company's PCIe Gen 6 switch has already secured six design awards and the company's recently introduced PCIe Gen 6 retimer secured a design award with a major OEM.

We increase our PT to $120, or ~27.5x our new CY28 NG EPS estimate of $4.33, as the recovery in the business builds momentum."

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