Citadel Securities Lowers PT On MCHP To $28

Citadel Securities has lowered its price target on Microchip Technology MCHP from $30 to $28 in light of the company's expected results for CY2Q11. Says Citadel, in its report, “After the close, Microchip negatively pre-announced CY2Q11 results, indicating sales would decline 1.5% qoq versus management guidance for sales to increase 1-6% qoq and consensus of up 3% qoq. The company also announced CY2Q11 non-GAAP EPS of $0.53 - $0.55 versus our estimate of $0.56 and the Street at $0.60. Management attributed the CY2Q11 shortfall to a number of factors, including broad based weakness, declines in automotive production, excess ordering in CY1Q11, softness at key computing OEMs, and lower gross margins. By segment, MCU and analog sales were down 2% qoq and 7% qoq, respectively. Licensing and memory sales were up 1.3% qoq and 0.6% qoq, respectively.” Citadel maintains a Reduce rating on the stock. MCHP closed yesterday at $37.48.