Zacks Investment Research downgraded shares of MICROCHIP TECHNOLOGY INCORPORATED (MCHP) from NEUTRAL to UNDERPERFORM on November 26, 2012, with a target price of $27.00.
Microchip Technology is one of the fastest growing providers of 16-bit and 32-bit microcontrollers. Earnings estimates have gone down significantly after the company reported its second quarter 2013 results, which missed the Zacks Consensus Estimate for the second time in a row. Sales continued to decline due to weak European markets and uncertain economic environment in the U.S. and China. Margins were hit by increased acquisition charges. The guidance provided by the company was also weak. The uncertain economic environment coupled with deceleration in worldwide GDP growth continues to plague Microchip. Hence, a significant improvement in business is not on the cards in the near term. Consequently, we downgrade our recommendation on the company to Underperform from Neutral.
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