Microchip guidance cut the ‘right move,’ says Citi

Citi analyst Christopher Danely says Microchip (MCHP) last night lowered guidance for the December quarter from a 6%-12% quarter-over-quarter revenue decline to a 12% decline due to lower turns business. The company also announced the closure of its wafer fab in Tempe, Arizona, which should result in annual cost savings of $90M by mid-2026, the analyst tells investors in a research note. Citi believes the guidance cut is the “right move” and remains confident in Microchip’s sales bouncing back faster than peers. It reiterates a Buy rating on the shares with an $82 price target