On Dec 31, 2014, Zacks Investment Research upgraded Microchip Technology Inc. MCHP to a Zacks Rank #2 (Buy) from Zacks Rank #3 (Hold) on its buoyant guidance for the upcoming third quarter of fiscal 2015.
Why the Upgrade?
In December, Microchip revised its third-quarter fiscal 2015 guidance upward to better reflect an improving business environment and robust earnings potential on the back of increased bookings. The company projected adjusted earnings per share in a range of 60 cents to 64 cents, up from earlier forecasts of 59 cents to 64 cents. The Zacks Consensus Estimate for the upcoming quarter presently stands at 56 cents.
Also, overcoming a slight hiccup, the semiconductor industry seems to have regained favor with investors. The Semiconductor Industry Association (SIA) has projected significant growth for the sector in the coming quarters, driven by robust demand for smartphones and automotive electronics.
As one of the better-positioned companies in the semiconductor universe, Microchip looks well set to capitalize on the industry's growth prospects and fortify its position in the industry in the coming quarters. Additionally, research shows that demand for memory chips and components used in cars will continue to improve in the global chip market, benefiting leading companies in the semiconductor space.
With accelerating bookings in its business driven by robust industry demand and impressive product designs, we remain encouraged by Microchip's prospects and bullish guidance.
Other Stocks to Consider
Microchip presently has a Zacks Rank #2 (Buy). Other semiconductor players include Ambarella, Inc. AMBA, Avago Technologies Limited AVGO and M/A-Com Technology Solutions Holdings, Inc. MTSI, each sporting a Zacks Rank #1 (Strong Buy).
MICROCHIP TECH MCHP: Free Stock Analysis Report
AVAGO TECHNOLOG AVGO: Free Stock Analysis Report
MA-COM TECH SOL MTSI: Free Stock Analysis Report
AMBARELLA INC AMBA: Free Stock Analysis Report
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