Microchip Earnings: Predictably Poor Near-Term Results but the Firm Is Turning the Corner

Wide-moat Microchip Technology reported predictably weak fiscal fourth-quarter results in line with expectations, while providing investors with a gloomy forecast for the June quarter. On the bright side, however, Microchip thinks that the June quarter will be the bottom for the severe inventory correction that the company and its peer group have faced in recent quarters. Our long-term forecast for the company remains intact and we’re confident that Microchip will continue to weather the storm through calendar 2024. We maintain our $90 per share fair value estimate. Shares sold off about 4% after hours and appear fairly valued to us.