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UPDATE: Goldman Sachs Upgrades Microchip Technology on Late-Cycle Outperformance, Construction Exposure

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In a report published Tuesday, Goldman Sachs analyst James Schneider upgraded the rating on Microchip Technology (NASDAQ: MCHP) from Neutral to Buy, and raised the price target from $42.00 to $46.00.

In the report, Goldman Sachs noted, “We are upgrading Microchip to Buy as we believe the Street is under-modeling out-year estimates by as much as 15%: (1) Microchip has the largest exposure to construction (res and non-res) in the group, and leading indicators such as the ABI suggest sales into this vertical are moving higher; (2) the stock meaningfully outperforms in the mid-to-late stages of the semi cycle due to exposure to distributors (50% of sales) and late-cycle verticals; (3) SMSC is set to drive $0.50 of accretion in CY2014E; (4) We think worries of MCU share loss to ARM solutions are overdone, with ARM having taken share mostly in smartcards and areas where Microchip does not participate.”

Microchip Technology closed on Monday at $40.33.

Latest Ratings for MCHP

DateFirmActionFromTo
Dec 2014Goldman SachsReinstatesNeutral
Dec 2014CitigroupMaintainsBuy
Oct 2014Credit SuisseMaintainsOutperform

View More Analyst Ratings for MCHP
View the Latest Analyst Ratings

Posted-In: Goldman Sachs James SchneiderAnalyst Color Upgrades Analyst Ratings

 

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