Zacks Research Adjusts Earnings Forecast for Microchip Technology

On February 4, 2025, analysts from Zacks Research announced a reduced earnings forecast for Microchip Technology Incorporated (NASDAQ:MCHP). In a research note directed at investors, they revised their estimated earnings per share (EPS) for the third quarter of 2025 down from $0.24 to $0.21.

This adjustment comes as part of a broader analysis, and the consensus estimate for the full fiscal year is now $1.31 per share. Zacks Research has also provided earnings estimates for subsequent periods, projecting $0.24 EPS for Q4 of 2025, $1.30 EPS for the entire fiscal year 2025, $0.35 EPS for the first quarter of 2026, and $0.39 EPS for the third quarter of 2026.

A number of different financial reports have recently highlighted the performance of Microchip Technology. On November 6, TD Cowen reduced their price target for the company from $80.00 to $70.00 while maintaining a “hold” rating. Goldman Sachs trimmed their target price from $72.00 to $63.00 on January 10, also issuing a “neutral” rating. Meanwhile, Evercore ISI upheld their “outperform” rating but lowered their target price from $101.00 to $95.00 on the same day that TD Cowen published their report.

Stifel Nicolaus and Mizuho have also adjusted their price targets, setting them at $87.00 and $72.00 respectively, while maintaining their buy and outperform ratings. Currently, the consensus from equity analysts includes one sell rating, five hold ratings, and thirteen buy ratings. According to MarketBeat data, Microchip Technology enjoys a consensus rating of “Moderate Buy” and an average price target of $81.67.

Recent Stock Performance

The stock for Microchip Technology opened at $53.11 on the day following the report. The company recorded a 1-year low of $51.37 and a high of $100.57 during this period. Its financial ratios include a debt-to-equity ratio of 0.71, a current ratio of 0.88, and a quick ratio of 0.48. The stock's 50-day simple moving average stands at $58.34, while the 200-day moving average is $70.38. Microchip Technology has a market capitalization of $28.52 billion and a price-to-earnings (PE) ratio of 37.14.

On February 6, Microchip Technology reported its latest quarterly earnings, revealing an EPS of $0.13, which amounted to a significant miss against analysts' consensus of $0.28 by $0.15. The company recorded a return on equity of 19.47% and a net margin of 14.22%.

Institutional Investment Trends

In the context of institutional investments, several hedge funds have recently made adjustments to their holdings in Microchip Technology. Czech National Bank increased its position by 6.1% during the third quarter, acquiring an additional 6,315 shares, bringing their total to 109,291 shares valued at $8,775,000.

Other investors, like GAMMA Investing LLC and Callan Family Office LLC, have similarly increased their stakes by 9.6% and 36.1% respectively, adding to their ownership in response to market conditions. Institutions collectively own approximately 91.51% of the stock in Microchip Technology.

Dividend Announcement

In a related announcement, Microchip Technology declared a quarterly dividend of $0.455 per share, to be paid to shareholders on March 7, 2025. The record date for this dividend is February 24, 2025, which will translate into an annualized dividend yield of 3.43%, with a payout ratio of 127.27%.

About Microchip Technology

Microchip Technology Incorporated is well regarded for its development, manufacturing, and sale of smart, connected, and secure embedded control solutions globally across the Americas, Europe, and Asia. The company provides various products, including general-purpose mixed-signal microcontrollers and specialized microcontrollers, catering to automotive, industrial, communication, and other sectors.

Zacks, Earnings, Forecast