Microchip Technology: The Recovery Is Real, But Execution Still Matters
Latest close: $81.26 on Oct. 6, 2026 Updated rating: Buy, maintained 12-month target: $98
Summary
I maintain a Buy rating on MCHP since the operating recovery is stronger, but approximately $5.1Bn of net debt, preferred-stock obligations and dilution keep this from being a risk-free rerating story.
Q1 FY27 revenue was $1.485Bn, up 38% Y/Y and above the prior guide midpoint, while non-GAAP EPS was $0.76 versus a $0.67-$0.71 guide.
The original recovery thesis is strengthened as inventory days fell to 175, bookings were well above 1 on a book-to-bill basis, and PCIe Gen6 connectivity design wins doubled sequentially to 12.
My base target is $98 using FY27E non-GAAP EPS of $3.65, a 28x P/E, and a six-month discount rate. That implies roughly 21% upside from the latest close.
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Source; timestech
