The latest analyst coverage could presage a bad day for Microchip Technology Incorporated (NASDAQ:MCHP), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the 24 analysts covering Microchip Technology, is for revenues of US$4.6b in 2026, which would reflect a measurable 3.9% reduction in Microchip Technology's sales over the past 12 months. Per-share earnings are expected to rise 7.6% to US$0.62. Previously, the analysts had been modelling revenues of US$5.2b and earnings per share (EPS) of US$1.21 in 2026. Indeed, we can see that the analysts are a lot more bearish about Microchip Technology's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Microchip Technology

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to US$65.02.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.1% by the end of 2026. This indicates a significant reduction from annual growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. It's pretty clear that Microchip Technology's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Microchip Technology. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Microchip Technology's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Microchip Technology.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Microchip Technology, including its declining profit margins. For more information, you can click here to discover this and the 1 other concern we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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