Microchip Technology "underweight," target price reduced - update

10/10/07 - Lehman Brothers

NEW YORK, October 10 (newratings.com) - Analyst Romit J Shah of Lehman Brothers maintains his "underweight" rating on Microchip Technology Inc (MCHP), while reducing his estimates for the company. The target price has been reduced from $36 to $34.

In a research note published yesterday, the analyst mentions that the company’s negative preannouncement for 2H07 indicates a weakening demand environment outside handsets and PCs. The analyst expects Microchip Technology’s December quarter revenues to decline sequentially on account of increased channel inventories and a slowdown in resales, the analyst says. The EPS estimates for 2007 and 2008 have been reduced from $1.43 to $1.41 and from $1.65 to $1.58, respectively.