Microchip Analyst Remains Bullish On The Stock As Backlog & Demand Remain Strong

  • After the company reaffirmed December quarter guidance, Raymond James analyst Melissa Fairbanks reiterated a Strong Buy rating on Microchip Technology Inc MCHP
  • While management is not hosting a call with investors until full results are out, the announcement indicated backlog and demand remain strong, and select components and technologies remain supply constrained. 
  • The current outlook (unchanged) reflects sequential growth between 3-5%. While the company has a history of narrowing the guidance range with mid-quarter updates, she believes the more comprehensive range accounts for some uncertainty, given macro concerns
  • Net, she believes MCHP’s PSP program provides reliability high visibility into genuine end market demand, as customers commit only their highest conviction orders to the non-cancellable and non-refundable terms of the agreement, and unsupported backlog reached another record high in the September quarter. 
  • She expects to get additional color regarding current supply and demand dynamics next week when CFO Eric Bjornholt presents at the Raymond James Technology Investors Conference on December 6.
  • Price Action: MCHP shares traded lower by 0.09% at $74.27 on the last check Tuesday.
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