Microchip Q4 sales positively tracking to mid-point, says B. Riley

B. Riley analyst Craig Ellis reiterates a Buy rating on Microchip (MCHP) with a $75 price target after the company conducted an update call. Microchip’s fiscal Q4 sales are tracking to the mid-point of guidance, which is a “positive evolution versus a downside update three months ago,” the analyst tells investors in a research note. The firm says that while some may have hoped for a guidance increase, that was “unreasonable at this still quite difficult macro level.” Riley believes Microchip’s bookings quality and levels in January and February are “visibly improved” relative to the past nine months. While the company did not decisively say the bottom is behind it, “its views that it is essentially in are credible,” contends the firm. In sum, Riley believes Microchip “took a significant step in re-establishing confidence” in its forward operations today. It sees a “readily attainable path” with the potential to drive $4.00 in annual earnings per share over time.