TXN - Microchip Offers Seemingly Less Recovery Upside But Still Significant Potential Margin Leverage
Sometimes being different isn’t best for short-term performance. Microchip (MCHP) is a little out of step with its peer group of analog and MCU companies with respect to its product and end-market exposures, and although the shares haven’t done poorly over the last three months, they have lagged many of the company’s peers in the analog/MCU space, as the company isn’t as well-leveraged to recoveries in markets like auto.
While Microchip’s shallower decline/shallower recovery may be playing into near-term performance, I believe it is the company’s ability to execute on margin leverage opportunities