Microchip Technology (MCHP) - Get Report surged to record levels in premarket trading Tuesday, rising 4.6% to $108.49, after analysts raised their price targets on shares of the semiconductor maker on news of better-than-forecast December sales and an improved backlog for the current quarter.
The Chandler, Arizona-based company said it now expects consolidated net sales for the December quarter to be between $1.281 billion to $1.288 billion, down between 3.75% and 4.25% sequentially.
A month ago, the company said it was expecting consolidated net sales to be $1.244 billion to $1.298 billion, or down between 3% and 7%.
Steve Sanghi, Microchip’s CEO, said in a statement that “based on several inflection points we are seeing in the business, we believe that the December 2019 quarter was the bottom of this cycle for Microchip, barring any negative developments on the U.S./China trade front or unexpected fallout from geopolitical events.”
“Microchip is seeing strength coming from all major geographies including the U.S., Europe and Asia, as well as several major end markets including data center, industrial and automotive," he said.
Several analysts boosted their ratings or increased their price targets on Microchip in response to the strong sales report.
SunTrust Robinson Humphrey analyst William Stein, who maintained his buy rating, increased his price target to $119 from $113.
Craig Ellis, an analyst with B Riley FBR raised his price target on Microchip Technology to $130 from $115. Ellis maintained his buy rating.
Analysts at KeyBanc Capital Markets raised their price target to $120 from $110, while analysts at Raymond James, who rate Microchip a strong buy with a price target of $115, said the stock "continues to trade at a discount."